PMR (based on Colin Drury, Management Accounting for Business) A division of PMR plc operates a...

Transcribed Image Text:

PMR (based on Colin Drury, Management Accounting for Business) A division of PMR plc operates a small private aircraft that carries passengers and small parcels for other divisions. In the year ended March 2020, it carried 1 024 passengers and 24 250 kg of small parcels. It incurred costs of 924 400£. The division assumes that 70% of its cost are variable and that 60 % of these vary with the number of passengers and the remainder with the weight of parcels. The company is now preparing its budget for the 3 months ending 30 June 2020. In this period, it expects: All prices to be 3% higher than the average paid last year. Activity levels to be: 209 passengers 7 200 kg of small parcels Yearly fixed costs are spread evenly throughout the year. PMR anticipates that the fixed expenses for the 3 months will increase by 10 000 £ in comparison with quarterly fixed costs of the year ended March 2020. You are asked to prepare the cost section of the budget for the 3 months ending 30 June 2020. The cost section has 3 parts. One question for each part. You have to justify your results (how is it you obtained each result). 1. 2020 2. 3. What are the budgeted passenger-related costs for the 3 months ending 30 June What are the budgeted parcel-related costs for the 3 months ending 30 June 2020 What are the budgeted fixed costs for the 3 months ending 30 June 2020 PMR (based on Colin Drury, Management Accounting for Business) A division of PMR plc operates a small private aircraft that carries passengers and small parcels for other divisions. In the year ended March 2020, it carried 1 024 passengers and 24 250 kg of small parcels. It incurred costs of 924 400£. The division assumes that 70% of its cost are variable and that 60 % of these vary with the number of passengers and the remainder with the weight of parcels. The company is now preparing its budget for the 3 months ending 30 June 2020. In this period, it expects: All prices to be 3% higher than the average paid last year. Activity levels to be: 209 passengers 7 200 kg of small parcels Yearly fixed costs are spread evenly throughout the year. PMR anticipates that the fixed expenses for the 3 months will increase by 10 000 £ in comparison with quarterly fixed costs of the year ended March 2020. You are asked to prepare the cost section of the budget for the 3 months ending 30 June 2020. The cost section has 3 parts. One question for each part. You have to justify your results (how is it you obtained each result). 1. 2020 2. 3. What are the budgeted passenger-related costs for the 3 months ending 30 June What are the budgeted parcel-related costs for the 3 months ending 30 June 2020 What are the budgeted fixed costs for the 3 months ending 30 June 2020

Answer rating: 100% (QA)

To prepare the cost section of the budget for the three months ending 30 June 2020 for PMR plcs division operating a small private aircraft we will ca... View the full answer