You are required to:

A) Convert the data given above into a flexible budget for 55% level of production for Reka Tif Bhd. (Show clearly the contribution margin, total variable cost, total fixed cost and net profit/loss). [15 marks] B) Differentiate between static budget and flexible budget using the performance report. (Range from sales to contribution margin) [6 marks] C) Analyses the variances in your answer for question (b), whether they are favourable (F) or unfavourable(UF). [4 marks]

QUESTION 4 Reka Tif Bhd. produce Jati Furniture for Asian market. Information for Division Jati Furniture is given below: Sales & Production Unit Budgeted 50,000 (25%) Budgeted 100,000 (50%) RM RM 2.500.000 775,000 500,000 5,000,000 1,550,000 1,090,000 Sales Direct material Labour (Overtime rate RM3/unit for 70,000-100,000 production) (Overtime rate RM4/unit for 100.000-150,000 production) 275,000 550,000 Other manufacturing cost (RM55,000 for 10,000 units of production) Divisional fixed expenses Profit 300,000 300,000 650,000 1,510,000 During the year, 110,000 units were produced and sold. Selling price per unit is RM45.00. The actual cost incurred for the year is as follow: Direct material Labour RM14.00 RM10.00 Additional information: i) Direct Labour is given overtime rate at RM3.50 hour for production 70,000 units and above. Than rate will increase to RM5.00/hour for production 100,000 unit and above. ii) Other manufacturing cost will be charged at RM50,000 per 10,000 units of production iil) Divisional Fixed expenses is RM3 per unit for 100,000 units of production