Many Inc. is a small SME that manufactures and distributes tofu. The product is created from curdled soya beans. During harvest season, the firm purchases soya beans from farmers and warehouses them. Depending on the weather, some years provide a bigger crop than others. Many Inc. can manufacture 560 blocks of tofu each month on average at variable costs of 15 KES per unit. The selling price per unit is 130 KES. The monthly fixed cost is 35,000 KES.

Many Inc. has prepared the budget for the year 2021 in 2020 using the information above.

Actual production for 2021:

Production and sales were 6,840 units. Sales price remained the same as budgeted

The variable costs were 16 KES per unit

The Fixed cost were 35,000

a. Prepare the budgeted income statement for the year ending 2021

b. Show the actual income statement at year ended 2021.

c. Analyze the variance in the budget.