Enigma Ltd has prepared a budget based on standard costs. It is shown below together with the

Question:

Enigma Ltd has prepared a budget based on standard costs. It is shown below together with the actual results.


Required 

(a) Prepare a flexed budget for 4250 units 

(b) Calculate: 

(i) Total cost variance 

(ii) Expenditure variance 

(iii) Direct material variance 

(iv) Direct labour variance. 

(c) Reconcile the actual cost incurred with the budgeted costs, using the variances calculated in (b).

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