Question 1

The following information has been extracted from Windhoek Manufacturers, a company that produces and sells cosmetics for the year ended 31 July 2022.

Actual Static budget Static budget

Units sold 40 000 30 000 20 000

N$ N$ N$

Revenue 2 360 000 1 800 000 1 200 000

Cost of sales (1 732 000) (1 290 000) (960 000)

Materials 760 000 600 000 470 000

Labour 632 000 450 000 300 000

Factory overhead 340 000 240 000 190 000

Gross profit 628 000 510 000 240 000

Period costs (348 800) (320 000) (290 000)

Selling and distributions 128 800 120 000 90 000

Administrative expenses 220 000 200 000 200 000

Operating income 279 200 190 000 (50 000)

REQUIRED:

1.1 Prepare a flexible budgeted statement for comprehensive incomes for 40 000 units using the above information from a static budget for 30 000 units showing clearly columns disclosing information for actual, flexed and variance. Total marks [25]