QUESTION 1: Mr. Adam was so ecstatic with the huge demand from all over the country after the Covid-19. However, as border control is still tightened, prices of certain components have increased. Due to that, the management has decided to increase the actual selling price to RM70,000 per unit of a LandRoamer. However, Mr. Adam is also so disappointed to see the large unfavourable variances shown in the company's performance report prepared by the assistant accountant. Even though he was happy by the favourable profit, all his operation results show the adverse result. Mr. Adam has heard about the flexible budgeting approaches. He called Mr. Muaz to discuss the implication of the variances reported and to plan a strategy for improving the company's performance. The following information relates to the performance report previously prepared: 1. Utilities and maintenance are semi-variable costs. Variable utilities and maintenance are RM385 per unit and RM250 per unit respectively. 2. Included in selling and administrative expenses is sales commission paid to their sales personnel at a rate of 1.5% of the selling price. 3. All other costs are fixed in nature. As the Finance Manager, Mr. Muaz is set to provide information required by Mr. Adam. He had called his assistant to prepare a corrected version of the performance budget report. As his account assistant, prepare the following report: a. Prepare a performance report for the year ended 31 March 2022. (11 marks) b. Based on your performance report: i. Which ONE cost should invite management's attention so that further investigation should be conducted? ii. Why should this cost be investigated further? iii. Explain ONE possible reason that could lead to this problem? Does it indicate poor performance of GCSB? (4 marks) C. For the coming period, should GCSB use incremental budgeting or zero-based budgeting? Explain your answer with TWO reasons. (4 marks) Total: 19 marks CS CamScannerTHE LandRoamer: is IT AS GOOD AS IT SEEMS? Despite the surge of interest in the RV industry, as well as the excitement and the careful planning in GCS B, Adam is feeling bad about his company's performance. What went wrong? He is so confident that his company is doing good and everything goes as planned. or even better than plan. However, the performance report for the year ended 315! March 2022 censored by his assistant accountant showed the opposite. The report, which has been prepared for a single division, the LandRaomer division, provided evidence that they are not efficient in their operation and that all variances show unfavourable trends. However. Adam knows that his company is good as they could actually produce i50 Londfloamers as cornporecl to the budgeted 120 units and it even shows a favourable net profit variance. Adam is feeling disturbed. He knows something is amiss. Furnished below is the financial data for the year ended 51 March 2022: The LandRoomer Division Performance Report for the year ended 31 March 2022 Budgeted Actual Variance 3.300 000 F 450,000 A 75 000 A 450 000 A 34,500 (A) s, A m Variable overhead Selling and administration ex - eases m Interest ex . enses 7 200 000 10 500 000 1 200 000 360.000 1 300.000 1 650 000 435 000 2 250,000 300 000 360 000 390 000 450 000 424 030 53 000 1 32,500 33,000 120 000 720 000 300 000 130 000 18 500 8 000 1 3B, 120, 720 300 180. 18,5 g!!!!;%aaaiiilliii TOTAL EXPENSES 5,982,?00 7,264,030 1,231,380 (A) moimm 3 235.920 2 ma 62:: F Adam has called Mr Muaz, his Finance Manager, to enlighten the situation. C5 CamScanner