a)state two objectives of budgetary planning and control systems.

b)State four financial budgets and suggest the manager dates for the preparation of each one, say in a manufacturing company.

Poifo Motlhaleng makes jackets for men labelled PoF2010.the variable cost per jacket is P350 and its selling price is P600.Fixed costs are P40 000.He targeted to make P50000 PROFIT.

Calculate the:

contribution margin if he sells 100 jackets

contribution margin ratio

How many jackets Poifo should sell to breakeven

How much he should sell to meet his desired target profit.

Fir value Ltd is a wholesale distribution firm which has provided you with the following information from stores in relation to a particular product line - CRIS20

Dates	Details	Units	Unit Price BWP	Value(BWP)
08/3/12	Delivery from manufacturer	500	10	5,000
12/3/12	Delivery from manufacturer	100	11.20	1,120
17/3/12	Issued to sales	400
25/3/12	Delivery from manufacturer	300	11.50	3,450
27/3/12	Issued to sales	250

Sales of 650 units@ P20 per item are recorded for the month. There is an opening stock of 250 units, valued at P 2 000 as at 1st March 2012

Required:

Calculate the gross profit for the month of March 2012 using each of the following methods of inventory valuation:

FIFO

LIFO

Weighted average.

Explain which inventory valuation is most relevant for decision making purposes.

The following budgeted profit statement has been prepared using absorption costing principles.

January to June 2017	July to December 2017
Sales 540 Opening inventory 100 Production costs: Direct materials 108 Direct labour 162 Overhead 90 460 Closing inventory 160 300 240 GROSS PROFIT Production Overhead: (Over)/under absorption Selling costs (12) Distribution costs 50 Administration costs 45 80 Net profit 163 77 Sales units 15000 Production units 18000	360 160 36 54 30 280 80 200 160 12 50 40 80 182 22 10 000 6 000

The members of the management team are concerned by the significant change in profitability between the two six months periods. As a management accountant, you have analyzed the data upon which the above budget statement has been produced, with the following

• The production overhead cost comprises both a fixed and a variable element. The latter appears to be dependent on the number of units produced, The fixed element of the cost is expected to be incurred at a constant rate throughout the year.
• The selling costs are fixed
• The distribution cost comprises both fixed and variable elements. The latter appears to be dependent on the number of units sold. The fixed element of the sot is expected to be incurred at a constant rate throughout the year.
• The addministart6ion a costs are fixed

Required:

Present the above budgeted profit statement in marginal costing format.

Mascot ltd has provided you with the following budgeted and actual data for the period ending 30th April 2013.

The standard cost information at the beginning of the period was based on an expected activity of 10 000 units.

Direct material: The specification per unit produced is 12kg@P10 per kg.

Direct Labor: The standard time allowed per unit is 8 hours@ P6 per hour

Overheads: All overheads are variable in nature and for the period they are budgeted at P160,000.Company policy is to absorb overheads at a predetermined rate per labour hour.

Selling price is expected to be P200 PER UNIT.

At the end of the period the actual results were as follows:

Sales revenue: P2880 000 representing 12 000 units sold

Material:; 160 000 kg were used st a cost of P1440 000.

Labour 108 000 hours were worked at a cost of P756 000.

Overheads: Actual expenditure P240 000

Required:

a)Prepare4 a standard cost card showing the cost and profit per unit and the overall budgeted profit for the period.

b)Calculate the actual profit for the period

c)Calculate the following variables:

1. Material variances(price and usage)
2. Labour variances(rate and efficiency)
3. Overhead variances(rate and efficiency)
4. Sales variances(price and volume)

With the aid of an example, explain the concept of ''inter-relationship between variances''