Required:

a) Present the original, flexed and actual budgets P&S for the month of October. (5 marks)

b) Present a detailed statement of various costs variances. (15 marks)

c) Calculate the sales variances for P&S for the month of October. (5 marks)

d) After analysing the possible causes for individual variances that you have produced, comment if the workers are entitled for the incentives. (10 marks)

Plugs & Switches Plc. (P&S) manufactures industrial plugs. For awarding insensitive to the factory workers it uses the following standard production cost. Standard cost of producing 1 plug Cost/unit Quantity 8 3 5 2 5 Direct material Direct labour Variable overheads 5 Unit kg hrs hrs Total 40 15 10 65 Planned production for December Monthly budgeted fixed overheads Budgeted selling price per plug 900 36,000 220 Actual results for October (plugs) Actual production units Actual sales for October 1000 250,000 Units Price/cost 9000 6 6000 4 Actual production costs Direct material Direct labour Variable overheads Fixed overheads Total cost for October Total 54,000 24,000 15,000 45,000 138,000