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Question 4 The following budgets are taken from the budget working papers of AB limited for the year ended 30 April 2021: Activity Level Direct Materials Direct Labour Production Overhead Selling Overhead Administration Overhead 60% f 30,000 40,500 46,000 15,000 28,000 70% f 35,000 47,250 52,000 17,000 28,000 80% f 40,000 54,000 58,000 19,000 28,000 Total 159,500 179.250 199,000 During April 2021, actual activity was 1,292 units which was equal to 68% activity. Actual costs for April 2021 were: Direct Materials Direct Labour Production Overhead Selling Overhead Administration Overhead 33,500 44,000 46.250 16,150 27,800 Total 167,700 Required: a) Prepare a budgetary control statement for AB limited comparing a suitably Flexed Budget with Actual Expenditure. Comment upon the variances that this statement shows 12 marks b) Explain the term principal budget factor and discuss its importance in the budget preparation process Page 8 of 12 4 marks c) Explain and discuss the role of a budget committee and budget manual in the budget preparation process 4 marks