Q$2(10)$

The following information was extracted from the books of Henkrin in $2023.$

$($Pula$)$

Sales revenue $80000$

Material $(20000)$

Labour $(24000)$

Production overhead $(6000)$

Gross profit $30000$

General expenses $16000)$

Operating profit $14000$

Additional Information on cost behaviour:

i$.$ Sales volume is $2000$ units

ii$.$ The material cost is totally variable.

iii. Each employee can only produce $500$ units each month.

iv$.$ The cost of each employee is P$6000$ each month.

v$.$ Production O$/$H are totally fixed costs.

vi$.$ General expenses are made up of a budgeted fixed cost of P$10000$ & a variable element.

Required: As a newly appointed Cost Accountant you have been asked to Flex the budget to the actual level of $2400$ units and submit a report to the Finance Manager by the end of the week.