Budget Qn 33

Question One (23 marky) Bridge and Blige Limited make metal casings for lawn mowers in one standard size, In February 2015 the company's budget for sales and related costs is as follows; TZS'000 Sales: 800 units x TZ5 35,000 28 000 Costs Direc: materinis: BOU Unite > (2ka x TZ5 6,0900) (9,600) Direct labour: 400 units s (1 hour a $28 7,300) 16,6007 Production overheads (4,000) 8,200 Selling and administrative overheads (2 300) Net Profit 6,100 The equal dcures for February 2015 are as follows! Sales: 900 Units @TZS 36.000 32,400 Costs Direct materials: 900 Units & (1 .Pkg x T25 5.560) 19.405) Direct labour: 900 units x (1.2,hours x TZS 7,000) (7.506) Production overheads 11,035 Selling and administrative overheads 124501 Net profit 8,585 Calculate unit cost for direct material, direct labour and sales price to be applied for the purpose of preparing flexed budget (6 marks) Prepare a flexed budget for 900 units for February 2015 and calculate the variances (1 marks) . Discuss the benefits of using flexed budgets V's Static budget in respect to evaluating a production department (6 marks)