Management Accounting CW$32...$

QUESTION $2$

Minto Bath Oils manufactures a single product. These products are sold to supermarkets and pharmacies. Minto's management would like information on certain estimates for $2023$ on some of its operation. Budgeted results and actual for January $2023$ are shown as follows:

$\backslash$table$[[,$BUDGET ACTUAL RESULTS$],[$Production and sales of the bough $($units$),1000,1500,],[,$$$,$$$,],[$Sales revenue $($a$),10,000,15,000,],[$Direct materials,$3,000,4,250,],[$Direct labour,$2,000,2,250,],[$Maintenance$,500,700,],[$Depreciation$,1,000,1,100,],[$Rent$,750,800,],[$Other costs,$1,{800}_{?},2_{,}{500}_{?},],[$Total costs $($b$),9_{,}{050}_{{?}_{?}},{11}_{,}{600}_{{?}_{?}},],[$Profit $($a$-$b$),{950}_{?},3,{400}_{?},]]$

Cost behaviours assumption:

Direct materials and maintenance costs are variable.

Although basic wages are a fixed cost, direct labour is regarded as variable to measure efficiency.

Rent and depreciation are fixed costs.

Other costs consist of fixed costs of $$800$ plus a variable cost of $$1$ per unit made and sold. Required:

a$.$ Calculate the budget cost allowance $($ie expected expenditure$)$ for $2023.(8$ marks$)$

b$.$ Prepare the flexible budget for January $2023.(30$ marks$)$

d$.$ Analyse the results

$(4$ marks$)$

c$.$ How would 'management by exception' be applied in budgeting?

$(2$ marks$)$