Concrete Products Ltd manufactures heavy paving slabs for sale to local authorities and garden paving slabs for domestic use.

The board of directors meets early in each month to review the company’s performance during the previous month. In advance of each meeting, the directors are presented with a computer printout summarizing the activity of the previous month. The computer printout in respect of the month of December Year 8 is set out below:

Further information

(a) The actual fixed costs incurred during the month equalled the budgeted fixed costs of £310,000.

(b) Stocks are valued at standard cost. You have recently been appointed a director of Concrete Products Ltd. At an earlier meeting with the finance director you received an explanation of the basis for the company’s monthly budget and you are satisfied that the budget has been prepared on a realistic basis.

Required

(a) Prepare, from the information contained in the computer printout, your analysis and comments on the company’s performance during the month of December Year 8, as background for the board meeting.

(b) List, with reasons, three questions you would ask at the meeting in order to give you a fuller understanding of the company’s performance during the month.

Transcribed Image Text:

Неavy paving Garden paving Actual tonnes Budget tonnes Actual tonnes Budget tonnes 8,500 8,500 Sales volume 29,000 29,000 27,500 27,500 10,500 10,500 Production volume £000s £000s £000s £000s Revenue 720 690 430 300 Variable cost of sales 280 270 170 260 127 Contribution 440 420 173