Management Accounting

The Income Statement of Nisha Steel Bhd for the months ended 31 October and 30 November 2019 are as follows:

	October	November
Sales (units)	10,000	12,000
	RM	RM
Sales revenue	165,000	198,000
Less Total Cost
Direct materials	42,000	50,400
Indirect materials	15,000	15,000
Direct labour	28,000	33,600
Indirect labour	20,000	22,400
Rent	4,500	4,500
Depreciation	5,800	5,800
Inspection costs	2,400	2,400
Electricity	15,500	18,000
Supervisors salaries	5,000	__5,000
	138,200	157,100
Profit/Loss	26,800	40,900

REQUIRED:

1. Explain THREE (3) differences between fixed and flexible budget.
2. From the above information prepare a budget in the same format for the month ended 31 December 2019 assuming that the factory will manufacture and sell 14,000 units during the month.