Libangani ltd is a company that manufactures school furniture and is based in Lobatse, in Botswana. The company has its financial year ended

$3$

$1$

$$December

$2$

$0$

$2$

$2$

$$and they prepared their budget as shown below:

Details Amount

$($

$

$)$

Direct materials

$6$

$4$

$,$

$0$

$0$

$0$

Direct wages

$3$

$6$

$,$

$0$

$0$

$0$

Variable Production overheads

$1$

$2$

$,$

$0$

$0$

$0$

Fixed Production overheads

$4$

$8$

$,$

$0$

$0$

$0$

Variable administrative and selling costs

$6$

$,$

$0$

$0$

$0$

Fixed administrative and selling costs

$1$

$4$

$,$

$0$

$0$

$0$

Profit

$2$

$0$

$,$

$0$

$0$

$0$

Additional information:

The company after ten weeks of trading realized that its sales budget was too optimistic and it has now been estimated that because of a reduction in sales volume, for the full year, sales will total $

$1$

$6$

$0$

$0$

$0$

$0$

$$which is only

$8$

$0$

$\%$

$$of the previously budgeted figure.

Required:

Using the marginal costing format, prepare a statement showing the amended sales and cost structure. $[$THIS QUESTION HAS BEEN ASNWERED ON CHEGG ALREADY, PLEASE EXPLAIN WHY THE VARIABLE ADMIN & SELLING COST AS WELL AS THE FIXED PRODUCTION OVERHEAD WAS NOT INCLUDED IN THE ANSWER$]$