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Question 3 Golf Plc manufactures one product, the Fore2. It is uncertain of demand for the next financial year but it is expecting to sell 7,500 units. The company has created two further budgets to provide information if the demand level is not met, as detailed in Table 1 - Flexible Budgets. The Fore2 selling price is 140 - 3 Table 1-Flexible Budgets Units 5,000 7,500 10,000 Sales Materials Labour Fixed Overhead Profit 000 700 150 115 100 385 000 1050 225 135 120 570 000 1400 300 155 140 805 Additional information Additional information Fixed overheads are a stepped cost, increasing by 20,000 for every additional 2,500 units Actual sales of Fore2 tured out to be 9,000 units, which were sold for 1,278,000 Actual expenditure on labour was 145,000. Labour costs are semi-variable. Actual materials cost was 300,000 and fixed costs totalled 122,000. Total 25. marks 14 points 3(a) Prepare a budget report for the flexed budget and the actual results. Calculate variances and indicate whether the variance is Favourable or Adverse. [14 mart 4 points 3(b) Explain what a rolling budget is and how it could assist Golf Plc. [4 m Question 3 Golf Plc manufactures one product, the Fore2. It is uncertain of demand for the next financial year but it is expecting to sell 7,500 units. The company has created two further budgets to provide information if the demand level is not met, as detailed in Table 1 - Flexible Budgets. The Fore2 selling price is 140 - 3 Table 1-Flexible Budgets Units 5,000 7,500 10,000 Sales Materials Labour Fixed Overhead Profit 000 700 150 115 100 385 000 1050 225 135 120 570 000 1400 300 155 140 805 Additional information Additional information Fixed overheads are a stepped cost, increasing by 20,000 for every additional 2,500 units Actual sales of Fore2 tured out to be 9,000 units, which were sold for 1,278,000 Actual expenditure on labour was 145,000. Labour costs are semi-variable. Actual materials cost was 300,000 and fixed costs totalled 122,000. Total 25. marks 14 points 3(a) Prepare a budget report for the flexed budget and the actual results. Calculate variances and indicate whether the variance is Favourable or Adverse. [14 mart 4 points 3(b) Explain what a rolling budget is and how it could assist Golf Plc. [4 m