Calculate the flexed budget

Assignment Help Finance Basics
Reference no: EM13821138

A consulting firm produces a service that requires the use of labor and materials. Each unit of service requires a standard labor time of 30 minutes (0.5 hours). The average pay rate for a labor hour is £20. The consulting firm considers all materials that are required for the service as variable overheads (OH), the cost of which is directly associated with the labor hours worked. It has been estimated that variable OH rate is £10 per service hour.

The budgeted and actual costs, revenue and units for the month November are given in the table below:

Original Budget

Actual

Units of Service

1,500

1,600

Sales Revenue

£120,000

£124,400

Labor hours

750

860

Labor cost

£15,000

£20,210

Variable OH costs

£7,500

£8,170

Fixed Cost

£68,000

£68,000

Total Cost

£90,500

£96,380

Operating Profit

£29,500

£28,020

1. Calculate the flexed budget and the key variances between budgeted and actual results.

2. Reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November

3. Discuss the calculated variances, and provide suggestions for better cost management (target length 300 words).

Reference no: EM13821138

Questions Cloud

Does mean that epidemiologic research is flawed : What do you think is a good approach to interpreting epidemiologic studies - Does mean that epidemiologic research is flawed? How can you promote good evidence-based science with epidemiologic studies?
What are the origins of that political ideology : Were you surprised by the political ideology to which you belong. Why or why not. What are the origins of that political ideology
Compare and contrast two of the alternative energy sources : Compare and contrast two of the following alternative energy sources: wind energy, solar energy, hydropower (stream), tidal power, biofuel, or geothermal energy. Discuss which energy source would be best suited for your home based on cost and availab..
Social control and criminal deviance : Social Control and Criminal Deviance
Calculate the flexed budget : Calculate the flexed budget and the key variances between budgeted and actual results. Reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November
Describe the three stages of cellular respiration : Describe the three stages of cellular respiration, where they occur in the cell, the substrates and reactants for each stage, and the number of ATP each stage produces
How are patients prepared for nuclear medicine procedures : What type of radiation is typically exploited in most nuclear medicine procedures and how are patients prepared for nuclear medicine procedures?
National health care providers adequately responding : Are the local and national health care providers adequately responding to the needs of people suffering from mental disorders
Describe the leadership qualities the parties : Identify the successful partnerships and collaborations mentioned in article and Describe the leadership qualities the parties possessed that made these partnerships successful.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd