You have been appointed financial controller of Constructabus plc, a coach building company, which specialises in two types of bus, a standard double-deck vehicle and a luxury coach model. The chassis and engine are bought in and the framework of each bus is built on the assembly floor. All the fixtures and fittings are added in the finishing shed to meet customers' specifications. The head of the accounts department has provided you with the following information for the year ended 31 August Year 8: Sales in units Total sales value Production in units Stock of finished units at 31 August Year 8 Labour hours per unit: Assembly floor Finishing shed Direct materials cost per unit Total variable selling costs Departmental Costs: Labour Variable overhead Fixed overhead Standard bus 100 3,075,000 90 20 2,000 1,000 4,000 150,000 Assembly floor 1,300,000 520,000 200,000 Luxury coach 120 4,020,000 80 30 1,000 1,500 4,000 144,000 Finishing shed 1,260,000 210,000 180,000 Further information: 1 Stocks are valued at variable cost of production for management accounting purposes. Work-in-progress may be ignored. At 1 September Year 7, stock values were 25,000 per standard bus and 21,500 per luxury coach. 2 The assembly floor has achieved full working capacity during the year but the finishing shed was 25% under-utilised. The head of the accounts department has prepared the following budget for the year ending 31 August Year 9: Sales in units Total sales value Production in units Direct materials costs Total variable selling costs Departmental Costs: Labour Variable overhead Fixed overhead Standard Bus 60 1,845,000 60 240,000 105,000 Assembly floor 1,590,000 795,000 200,000 Luxury coach 150 5,475,000 145 725,000 180,000 Finishing shed 1,665,000 277,500 220,000 Further information: 1 Labour hours per unit are assumed to be the same as for the year ended 31 August Year 8. 2 Due to changing patterns in public transport, the budget has recognised that demand for standard buses has fallen by 40% but that sales of the luxury coaches will expand by 25%. Required: Prepare a report for the board which provides: (a) a statement of budgeted profit for each product for the year ending 31 August Year 9; (b) a comparison of this budget with the actual results for each product for the year ended 31 August Year 8; and (c) comments on your analysis.