QUESTION 7 [7 MARKS] Ramuthunyana (Pvt) Ltd. is comparing budget and actual data for the last four months.

	Budget	Actual
	P	P
Sales	950 000	922 500
Cost of sales
Raw materials	133 000	130 500
Direct labour	152 000	153 000
Variable production overheads	100 700	96 300
Fixed production overheads	125 400	115 300
	438 900	427 400

The budget was prepared based on 95 000 units produced and sold, but actual production and sales for the four months period were 90 000 units. Ramuthunyana (Pvt) Ltd uses standard costing and absorbs fixed production overheads on a machine hour basis. A total of 28 500 standard machine hours were budgeted. A total of 27 200 machine hours were actually used in the period. Required: Prepare a revised budget at the new level of activity using a flexible budgeting approach