Solution-Calculate the flexed budget and the key variances

Calculate the flexed budget and the key variances

Assignment Help Corporate Finance

Reference no: EM13214090 , Length: 300 words

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: EM13214090

Questions Cloud

Terrance toman is employed by effects plus : Terrance Toman is employed by Effects Plus. One of the primary customers of their unique services is Electric Visions. The two companies team together frequently. Prior to joining Effects Plus Terrance worked for the US Army.

Calculate point price elasticity of demand for each customer : The Fun-Land Amusement Park is a 40-acre fun park full of rides, shows, and shops. Fun-Land's marketing department segments its customer base into two parts: local patrons and tourists. Fun-Land assumes local patrons are more price sensitive than ..

Explain gasoline efficiency is measured : In Europe, gasoline efficiency is measured in km/L. If your car's gas mileage is 21.0 mi/gal, how many liters of gasoline would you need to buy to complete a 142 km trip in Europe?

Russians affected by dual labor market : Search for Were The Russians Affected By Dual Labor Market, Environmental Justice Issues, Affirmative Action, Redlining, Double Jeopardy, Institutional Discrimination, Reverse Discrimination, Glass Ceiling, Glass Walls Or Glass Escalator?

Calculate the flexed budget and the key variances : Calculate the flexed budget and the key variances between budgeted and actual results and reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November

Explain what mass of ammonium sulfate is required to react : What mass of Ammonium sulfate is required to react with 60kg of Potasium nitrate to obtain

Should you accept proposal if the goal is to maximize profit : You have just received a proposal from the marketing department that your firm's advertising budget should be increased by 20% from its current level of $250,000. The marketing department feels the proposed increase will stimulate sales and enhanc..

Long-term memory affect your critical thinking skills : How is information stored into your long-term memory? How does information stored in your long-term memory affect your critical thinking skills?

A pitot-static tube probe connected to a water manometer : A Pitot-static tube probe connected to a water manometer is used to measure the velocity of air. If the deflection deflection (the vertical distance between the fluid levels in the two arms) is 7.3 cm, determine the air velocity.

User Account

All Pages

Calculate the flexed budget and the key variances

Reference no: EM13214090 , Length: 300 words

Reference no: EM13214090

Questions Cloud

Reviews

Write a Review

Corporate Finance Questions & Answers

Impact of the global economic crisis on business environment

Explain the short and the long-run effects on real output

Examine the requirements for measuring assets

Financial analysis report driven by rigorous ratio analysis

Calculate the value of the merged company

Stock market project

Write paper on financial analysis and business analysis

Intermediate finance

Average price-earnings ratio

Determine the financial consequences

Prepare a spread sheet model

Principles and tools for financial decision-making

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT