Show ALL workings. Marks may be deducted for loss of clarity of expression and neatness of presentation.

Question 3

Fixed budget for 5,000 units and the actual results of sales and production costs for the month ended 31 March 2020 of Moon Limited were as follows:

Required:

Prepare a budgetary control statement for the month ended 31March 2020 for Moon Limited based on a flexible budget with 5,200 units of production volume.

You should indicate the following columns in the statement:

- Flexible Budget

- Actual Results

- V ariance

All workings for the flexible budget should be shown. Workings carry marks.

Actual Budgeted 5,000 units Production and Sales Volume 5,200 units $ Sales 250,000 280,000 Production Cost: Direct material (variable) 18,000 19,220 27,000 26,080 19,000 20,000 Direct labour (variable) Fixed production cost Selling & Administration Cost Selling expenses (variable) Administration overhead (fixed) 6,000 7,040 10,000 9,600 Net Profit 169,000 199,060