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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:

  1. 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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