Hi could you please help me answer this question and provide solutions, Quite confused.

SECTION A Question 1 CloudTech is a specialist retailer that are planning their budget for the next year and expecting another period of uctuating sales that are difcult to anticipate. The manager of the CloudTech store has recently been on a training course where she learned about exible budgeting and using different pricing strategies to encourage sales. She has asked you to help her develop the budget using different levels of activity and also to suggest future price promotion activities. The following information is relevant: The average selling price per tablet is 465. The average direct cost of a tablet is 280. If the store purchases more than 420 tablets then a quantity discount of 4% applies to all purchases. Labour costs are for 3 staff working an average of 35 hours per week over 48 weeks in the year. c The current labour rate paid to staff is 7.60 per hour. 0 Staff can be paid overtime if a particular sales promotion requires evening or extended store open hours. The manager's salary is 34,500. The manager expects the operating expenses of rent and rates, consumables and heating to vary between 44,552 at sales of 700 tablets and at 40,095 at sales of 460 tablets. If sales exceed 590 tablets then the store would need to increase the stock and warehouse capacity, this would increase the overhead costs by 12,000. It has been suggested that extending the store opening hours to 20:00 one night a week could increase annual sales to over 650 tablets. The extended opening hours would incur an additional overtime cost of 1 ,650 and additional heating and lighting costs of 450 per year. REQUIRED (a) The manager has suggested you prepare a exible budget for three levels of sales: 540, 620 and 740 tablets. (8 marks) (b) The approved budget was decided at a demand level of 630 and to include the extended opening hours. The actual results for the period were: Sales units (tablets) 585 Sales value 252,500 Direct cost 186,200 Discount 3,885 Labour cost 32,500 Manager's salary 34,500 Fixed overhead 38,650 Energy and heat 4,500 Warehouse cost 9,500 Overtime payments 2,820 Heat and light for extended opening hours 310 Prepare a variance report comparing the approved budget of 630 to the actual results for the period. Comment on the variances calculated in the report. (5 marks) (c) Prepare a variance report that compares a exible budget for 585 tablets with the actual results for the period. Comment on the variances calculated in the report. (5 marks) (d) Critically discuss the findings you have calculated in parts (b) and (c) above, with particular reference to any issues that may arise out of interpretation of the reports. Suggest how the use of exible budgets can inform the development of alternative pricing strategies that CloudTech Store could use to encourage increased sales. (7 marks) TOTAL 25 MARKS