QUESTION TRUECARE Consultancy organizes seminars for small and medium-sized businesses for the East Coast area. The...
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QUESTION TRUECARE Consultancy organizes seminars for small and medium-sized businesses for the East Coast area. The seminars are run on premises which are rented especially for conducting of seminar only. The seminars are presented by freelance expert speakers. Each seminar is of standard type and therefore be treated alike for budgetary control purposes. Currently, TRUECARE uses fixed budgets to control expenditure. The following data shows the actual costs of the seminar's activities for the month of December 2020, compared to the budgeted figures. Number of seminars conducted Expenditures: Speaker's fee Rental of premises Depreciation of equipment Stationery Catering Insurance Administration Seminar Activities December 2020 Actual 10 seminars 5,000 3,000 400 1.060 3,000 1,400 3,300 Budget 12 seminars 6.360 3,000 360 1.200 3,500 1,640 3,240 Variances 2 seminars 1,360 (40) 140 500 240 (60) You have recently started to work as the assistant management accountant for TRUECARE Consultancy. In a meeting with the training manager, he expressed some doubt about the usefulness of the above statement in providing control information on the seminar's activities. Since he has heard about the flexible budget from his business associate, he become very interested in the possibility of using flexible budgets to control the seminars activities. As an assistant to the management accountant, you spent some time analysing the behaviour patterns to the costs incurred in conducting of seminars. Your findings are summarized as follows: 1. Depreciation of equipment is a fixed cost il. Administration is a fixed cost The budget figures for the catering costs and insurance costs include a fixed element as follows: -Catering RM500 -Insurance RM200 Required: a) Based on the information provided, prepare a flexible budget performance report based on the actual number of seminars held for the month of Dec 2020, Clearly showing the amount of variance arose. QUESTION TRUECARE Consultancy organizes seminars for small and medium-sized businesses for the East Coast area. The seminars are run on premises which are rented especially for conducting of seminar only. The seminars are presented by freelance expert speakers. Each seminar is of standard type and therefore be treated alike for budgetary control purposes. Currently, TRUECARE uses fixed budgets to control expenditure. The following data shows the actual costs of the seminar's activities for the month of December 2020, compared to the budgeted figures. Number of seminars conducted Expenditures: Speaker's fee Rental of premises Depreciation of equipment Stationery Catering Insurance Administration Seminar Activities December 2020 Actual 10 seminars 5,000 3,000 400 1.060 3,000 1,400 3,300 Budget 12 seminars 6.360 3,000 360 1.200 3,500 1,640 3,240 Variances 2 seminars 1,360 (40) 140 500 240 (60) You have recently started to work as the assistant management accountant for TRUECARE Consultancy. In a meeting with the training manager, he expressed some doubt about the usefulness of the above statement in providing control information on the seminar's activities. Since he has heard about the flexible budget from his business associate, he become very interested in the possibility of using flexible budgets to control the seminars activities. As an assistant to the management accountant, you spent some time analysing the behaviour patterns to the costs incurred in conducting of seminars. Your findings are summarized as follows: 1. Depreciation of equipment is a fixed cost il. Administration is a fixed cost The budget figures for the catering costs and insurance costs include a fixed element as follows: -Catering RM500 -Insurance RM200 Required: a) Based on the information provided, prepare a flexible budget performance report based on the actual number of seminars held for the month of Dec 2020, Clearly showing the amount of variance arose.
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Seminar Activities Flexible Budget December 2020 Flexible Budget Actual Seminar Vari... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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