TK Plc is company which exports most of its products to neighbouring countries . It has prepared the following fixed budget for the coming year.

Sales 10,000 units

Production 10,000 units

$

Direct Materials 50,000

Direct Labour 25,000

Variable overheads 12,500

Fixed overheads 10,000

Total 97,500

Budgeted selling price $ 10 per unit

At the end of the year , the following costs had been incurred for the actual production of 12,000 units

$

Direct Materials 60,000

Direct Labour 28,500

Variable overheads 15,000

Fixed overheads 11,000

Total 114,500

The actual sales were 12,000 units at $ 126,000

Required

a) Prepare a flexed budget for the actual activity for the year

b) Calculate the variances between actual and flexed budget (Use marginal costing approach)

c) Explain the usefulness of a cash budget to an organisation

d) Explain four (4) ways in which TK Plc may protect itself against foreign currency risk