Question
The Income Statement of Nisha Steel Bhd for the months ended 31 October and 30 November 2019 are as follows: October November Sales (units) 10,000
The Income Statement of Nisha Steel Bhd for the months ended 31 October and 30 November 2019 are as follows:
| October |
November |
Sales (units) | 10,000 | 12,000 |
| RM | RM |
Sales revenue | 165,000 | 198,000 |
Less Total Cost |
|
|
Direct materials | 42,000 | 50,400 |
Indirect materials | 15,000 | 15,000 |
Direct labour | 28,000 | 33,600 |
Indirect labour | 20,000 | 22,400 |
Rent | 4,500 | 4,500 |
Depreciation | 5,800 | 5,800 |
Inspection costs | 2,400 | 2,400 |
Electricity | 15,500 | 18,000 |
Supervisors salaries | 5,000 | __5,000 |
| 138,200 | 157,100 |
Profit/Loss | 26,800 | 40,900 |
REQUIRED:
- Explain THREE (3) differences between fixed and flexible budget. (9 marks)
From the above information prepare a budget in the same format for the month ended 31December 2019 assuming that the factory will manufacture and sell 14,000 units during the month.
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