It would be beneficial if the 3 months figures were shown instead of just the total for the quarter. Cost of production budget: Budgeted total units shown is incorrect and has not been applied consistently. You have used the correct amount 9,050 in your Budgeted Direct materials calculation, however it is not shown under Budgeted Total units The figures shown on your work in red need to be amended Income Statement: Sales, Cost of production, Gross Profit and Net Income figures are incorrect Cost of Production: Actual figure is correct, the Budgeted figure is not Performance Report: Budgeted Sales, Cost of Production, Gross Profit and Net profit are incorrect Error in Actual Total Expense calculation Variance figures in red need to be updated once the items above have been addressed. Please make the necessary amendments required, update all effected figures and reports, and then resubmit your work.

J. Jones Pty Ltd has provided the following information for the quarter ended in March 2016. Budget production cost per unit: Budget Per unit $ Actual Per unit $ Direct materials 41,800 42.3 Direct labour 1.20 1.15 Indirect - variable 3.60 3.50 Plus Direct - fixed (per month) 8000 8500 Sales estimates (number of items): Budget Actual January 2800 2600 February 3000 2990 March 3250 3560 The budget selling price for the product is $85 per box, but the company's actual price varies according to negotiations with customers who buy in bulk. Sales revenue: Actual $ January 224 120 February 249 665 March 306 010 Period expenses: Budget January February Actual March January February March Administration expenses 16 700 17 000 17 500 17 000 17 200 16 500 Selling expenses 47 600 51 000 55 250 49 306 54 926 67 322 Financial expenses 8 500 8 500 8 500 8 500 8 500 8 500 Activity From this data you are required to prepare the following reports using the software of your choice and analyse these reports to present a variation report. Assume that a variation of +/5% of the actual result compared to the budgeted figure is acceptable in your analysis. a) Cost of production budget b) Income statement budget c) Cost of production d) Prepare an income statement performance report for budget and actual showing gross profit and net profit for each month and the quarter. e) Prepare a performance report showing the variance for the quarter in dollars and percentages. f) An analysis of the report. Assume that a variation of +/- 5% budget to actual is acceptable in your analysis. You have presented a good effort. There are some changes required to your work as indicated in the attached copy of your work and as follows: It would be beneficial if the 3 months figures were shown instead of just the total for the quarter. Cost of production budget: Budgeted total units shown is incorrect and has not been applied consistently. You have used the correct amount 9,050 in your Budgeted Direct materials calculation, however it is not shown under Budgeted Total units The figures shown on your work in red need to be amended Income Statement: Sales, Cost of production, Gross Profit and Net Income figures are incorrect Cost of Production: Actual figure is correct, the Budgeted figure is not Performance Report: Budgeted Sales, Cost of Production, Gross Profit and Net profit are incorrect Error in Actual Total Expense calculation Variance figures in red need to be updated once the items above have been addressed. Please make the necessary amendments required, update all effected figures and reports, and then resubmit your work. a) Details J. JONES PTY LTD Cost of Production Budget For the each of the period of January, February and March Budget ed Total units Actu al Total units Budgeted Actual Varianc e %,vari ance C.N Cost Cost per unit Cost per unit Cost Direct materials 9,250 9,150 41.80 378,290 42.30 387,045.00 8,755 2.31% U Direct Labor 9,250 9,150 1.20 11,100 1.15 10,522.50 -577.50 -5.20% F Indirect - variable 9250 9150 3.60 33,300 3.50 32,025.00 -1,275 -3.83% F 1500 6.25% U 8402.50 1.88% F Plus Direct - fixed 24,000 25,500.00 Cost of production 446,690 455,092.50 C.N = conclusions of the variances. b) J. JONES PTY LTD Income statement Budget For the each of the quarter ended in March 2016 Budget Sales 786,250 Less cost of production 446,690 Gross profit 339,560 Less expenses: Administration expenses Selling expenses Financial expenses 51,200 153,850 25,500 Total expenses 230,550 Net income 109,010 c) Cost of production Budgeted Actual 446,690 455,092.50 d) Income statement performance report for budget and actual for each month J. JONES PTY LTD Income statement performance report For the month of January 2016 Budget Actual Sales 224,120 238,000 Less costs of production Direct materials 117,040 109,980 Direct labor 3,360 2,990 Indirect-variable 10,080 9,100 Indirect -fixed 8,000 8,500 Cost of production 130,570 138,480 Gross Profit 93,550 99,520 Less expenses: Administrative expenses 16,700 17,000 Selling expenses 47,600 49,306 8,500 8,500 Financial expenses Total expenses 74,806 72,800 Net profit 18,744 26,720 J. JONES PTY LTD Income statement performance report For the month of February 2016 Budget Actual Sales 249,665 255,000 Less costs of production Direct materials Direct labor Indirect-variable Indirect -fixed 125,400 126,477.00 3,600 3,438.50 10,800 10,465.00 8,000 8,500.00 Cost of production 148,880.50 147,800 Gross Profit 100,784.50 107,200 Less expenses: Administrative expenses 17,000 17,200 Selling expenses 51,000 54,926 8,500 8,500 Financial expenses Total expenses 80,626.00 76,500 Net profit 20,158.50 30,700 J. JONES PTY LTD Income statement performance report For the month of March 2016 Budget Actual Sales 306,010 276,250 Less costs of production Direct materials 135,850 150,588 3,900 4,094 Indirect-variable 11,700 12,460 Indirect -fixed 8,000 8,500 Direct labor Cost of production 175,642 159,450 Gross Profit 130,368 116,800 Less expenses: Administrative expenses 17,500 16,500 Selling expenses 55,250 67,322 Financial expenses 8,500 8,500 Total expenses 92,322 81,250 Net profit 38,046 35,550 e, f,) Performance report showing the variance for the quarter in dollars and percentages. J. JONES PTY LTD Performance report For the quarter ended March 2016 Details Budget Actual Variance %variance Conclusion Sales 786,250 779,795 -6,455 -0.82% Unfavorable Cost of production 446,690 455,092.50 -8,402.50 -1.88% Favorable Gross profit 339,560 324,702.50 -14,857.50 -4.38% Unfavorable Administration 51,200 expenses 50,700 -500 -0.98% Favorable Selling expenses 153,850 171,554 17,704 11.51% Unfavorable Financial expenses 25,500 25,500 0 0 Acceptable Total expenses 230,550 273,254 42,704 18.52% Unfavorable Net profit 109,010 51,488.50 -57,521.50 -52.77% Unfavorable Expenses