QUESTION 2 (12 Marks)

REQUIRED Use the information provided below to prepare the Performance report indicating original budget, actual budget, flexible budget and variances.

INFORMATION

Robex Ltd manufactures a single product. It originally planned to produce and sell 8 000 units during the year, but the actual activity level was 11 000 units. The budgeted and actual income and costs for the year are as follows: Original Budget Actual result

\begin{tabular}{|l|c|c|} \hline & Original Budget & Actual results \\ \hline Volume & 8000 units & 11000 units \\ \hline Sales & R & 1815000 \\ \hline Cost of sales & 1280000 & (1450000) \\ \hline Direct Materials & (1028000) & 528000 \\ \hline Direct labour & 360000 & 440000 \\ \hline Variable overheads & 304000 & 242000 \\ \hline Fixed overheads & 144000 & 240000 \\ \hline Gross Profit & 220000 & 365000 \\ \hline \end{tabular} \begin{tabular}{|l|c|c|} \hline & Original Budget & Actual results \\ \hline Volume & 8000 units & 11000 units \\ \hline Sales & R & 1815000 \\ \hline Cost of sales & 1280000 & (1450000) \\ \hline Direct Materials & (1028000) & 528000 \\ \hline Direct labour & 360000 & 440000 \\ \hline Variable overheads & 304000 & 242000 \\ \hline Fixed overheads & 144000 & 240000 \\ \hline Gross Profit & 220000 & 365000 \\ \hline \end{tabular}