Please refer attached.

Required to:

1. Calculate the flexed and actual budget

1. Calculate the following variances:

Sales variances; volume and price

Direct material variances; usage and price

Direct labour variances; efficiency and rate

Fixed overhead variance; spending

1. providing possible explanations for the variances that you have calculated
2. suggest as to how the company might try to improve its cost control.

Bonacom Ltd is a furniture manufacturer. One of its products, a table, has the following standard costs: Direct materials (8m @ 3/m) 24.00 Direct labour (1 hour @ 25/hr) 25.00 Fixed overheads 16.00 65.00 Selling price 95.00 Standard profit margin 30.00 The table is made from solid oak and the above materials reflect the size of the table in square metres. The monthly production and sales are planned to be 800 units. The actual results for March were as follows: Sales revenue 75,330 Less Direct materials (19,250) (7,000m) Direct labour (22,100) (850 hours) Fixed overheads (13,000) Operating profit 20,980 There was no opening or closing stocks. The company manufactured and sold 810 tables. Required: a) Calculate the flexed and actual budget b) Calculate the following variances: Sales variances; volume and price Direct material variances; usage and price Direct labour variances; efficiency and rate Fixed overhead variance; spending c) providing possible explanations for the variances that you have calculated d) suggest as to how the company might try to improve its cost control