You are working as a management accountant in Rawal Constructions limited who have been entered new in this business as the provider of building materials. In order to facilitate from your skills of budgeting, they provide you the actual and budgeted results about the business as can be seen below. The CEO asks you to present the true picture of the business as the business are in its initial phase and if any issues exist, these can be taken care immediately. Budget (РKR) September Actual (РKR) Budget per ton September Revenue 6.5 78000 75900 Units sold 12000 11500 Less: Direct costs Direct labor 2.83 33960 33000 Equipment hire Other 0.47 5640 6300 variable 0.78 9360 9300
You are working as a management accountant in Rawal Constructions limited who have been entered new in this business as the provider of building materials. In order to facilitate from your skills of budgeting, they provide you the actual and budgeted results about the business as can be seen below. The CEO asks you to present the true picture of the business as the business are in its initial phase and if any issues exist, these can be taken care immediately. Budget (РKR) September Actual (РKR) Budget per ton September Revenue 6.5 78000 75900 Units sold 12000 11500 Less: Direct costs Direct labor 2.83 33960 33000 Equipment hire Other 0.47 5640 6300 variable 0.78 9360 9300
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You are working as a management accountant in Rawal Constructions limited who have been
entered new in this business as the provider of building materials. In order to facilitate from your
skills of budgeting, they provide you the actual and budgeted results about the business as can be
seen below. The CEO asks you to present the true picture of the business as the business are in
its initial phase and if any issues exist, these can be taken care immediately.
Budget
(РKR)
September Actual
(РKR)
September
Budget per ton
Revenue
6.5
78000
75900
Units sold
12000
11500
Less: Direct costs
Direct labor
2.83
33960
33000
Equipment hire
Other
0.47
5640
6300
variable
0.78
9360
9300
costs
Total
4.08
48960
48600
Contribution
2.42
29040
27300
Required:
1. You are required to make a flexed budget for the month of September.
2. Conduct variance analysis both in terms of amount and per unit data.
3. Provide suggestions to the CEO regarding the usage of budgeting and its role in
performance evaluation based on your findings.
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