a) As the company's management accountant, you are required to prepare a columnar statement showing, by element of cost, the following: i) Original budgetii) Flexed budgetiii) Actual performanceiiii) Total variance. workings for the two main variances (material variance and labour variance). b) Comment on two possible reasons for the variances in question (a). c) Your company is currently using traditional budgeting on an annual basis. You are asked to comment on its current budgeting process by critically evaluating its application. d) What other options can the company have beyond the use of budgets?

A company is running a standard costing system. The table below presents information relating to one of its products, called Z. which is made in one of the company departments: Direct labour {one hour at E? per hour) 'Van'able production overhead varies with units produced Budgeted Fixed production overhead. per month: 100,000 Budgeted production for product Z: 20.000 unit per month Actual production and costs for this month were as follows: Direct Labour: H.300 hours Variable Production Overhead incurred 58,800 Fixed Production Overhead incun'ed 104 000