QUESTION $6.$

Imagine you manage a coffee shop. You create a budget for monthly expenses based on your average sales volume. However, sales fluctuate throughout the year. How could a flexible budget be helpful in this situation? Explain these differences by completing the table variance below.

$(10$ marks$)$

Flexible Budget Performance Report For the month ended $31$ December $2023$

$\backslash$table$[[$Budgeted number of clients,$5,000,,,],[$Actual number of clients,$5,200,,,],[$Overhead$,\backslash$table$[[$Cost$],[($per$],[$client$)]],\backslash$table$[[$Budget$],[$basedon$],[5,200],[$clients$]],\backslash$table$[[$Actual$],[$costs$],[$incurred$],[$for $5,200],[$clients$]],$Variance$],[$Variable overhead costs:$],[$Postage supplies,RM$1\mathrm{.}20,$RM$6,240,$RM$6,400,],[$Government tax,$4\mathrm{.}00,20,800,22,300,],[$Electricity $($variable$),0\mathrm{.}20,1,040,1,020,],[\backslash$table$[[$Total variable overhead$],[$costs$]],$RM$5\mathrm{.}40,$RM$28,080,$RM$29,720,],[\backslash$table$[[\backslash$table$[[\backslash$table$[[$Budgeted fixed$],[$overhead costs:$]],,,,]]]]],[$Employee salaries,,$8,000,8,100,],[$Rent$,,12,000,12,000,],[$Insurance$,,1,000,1,000,],[\backslash$table$[[$Utilities other than$],[$electricity$]],,500,470,],[$Total fixed overhead costs,,$21,500,21,570,],[$Total overhead costs,,RM$49,580,$RM$51,290,]]$