Management accounting question

Required:

i. Prepare a statement showing September 2021 revenue and spending variances. (20 marks)

ii. Comment on each variance of RM10,000 or more by suggesting possible reasons linking to the current economic situation for the variance reported in part a) i. (8 marks)

iii. Discuss the significant of variance analysis in cost management. (6 marks)

a) JT Limited is a manufacturing company that manufactures wooden horses for toy shop in Malaysia. JT has formulated the following formulas develop the planning budget where q is based on the budgeted number of wooden horses produced. The budgeted number of wooden horses for the month of September 2021 is 20,000 units. Data concerning the cost formulas are as follows: RM159 RM23 9 Cost Formula Revenue RM1109 Expenses: Material Supplies Wages and salaries RM9,000 + RM65 q Equipment RM15,500 Insurance RM1,500 Administration RM3,200 + RM0.25 q Maintenance RM600 + RM0.20 q During the month of September 2021, the company actually produced 20,500 units of wooden horses which sold at RM104.50 per unit and incurred the following costs: Material Supplies Wages and salaries Equipment Insurance Administration Maintenance RM RM317,750 RM487,900 RM1,136,500 RM15,500 RM1,800 RM7,300 RM3,650