Melia Ltd has budgeted to manufacture and sell 50,000 units of product M55 for the year...

 

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Melia Ltd has budgeted to manufacture and sell 50,000 units of product M55 for the year ending 31" December. However, due to a shortage of raw material, it was only able to manufacture and sell 45000 units, (a) Complete the following table to show a flexed budget and the resulting variances against this budge for the year. Show the actual amount, for sales revenue and each cost, in the column headed Variances: (5 marks) Units sold Sales revenue Less: costs Direct material and direct labour Variable overheads Fixed overheads Profit from operations Original budget 50,000 £,000 1,200 300 400 350 150 Flexed budget 45,000 £,000 Actual 45,000 £,000 1,050 260 410 330 50 (b) Comment briefly on all possible reasons behind variances? Variances £,000 (5 marks) Melia Ltd has budgeted to manufacture and sell 50,000 units of product M55 for the year ending 31" December. However, due to a shortage of raw material, it was only able to manufacture and sell 45000 units, (a) Complete the following table to show a flexed budget and the resulting variances against this budge for the year. Show the actual amount, for sales revenue and each cost, in the column headed Variances: (5 marks) Units sold Sales revenue Less: costs Direct material and direct labour Variable overheads Fixed overheads Profit from operations Original budget 50,000 £,000 1,200 300 400 350 150 Flexed budget 45,000 £,000 Actual 45,000 £,000 1,050 260 410 330 50 (b) Comment briefly on all possible reasons behind variances? Variances £,000 (5 marks)

Answer rating: 100% (QA)

Flexible budget selling price per unit 120000050000 24 material and labour cost ... View the full answer