Prepare a fixed budget and a flexible budget, Managerial Accounting

Assignment Help:

Question:

A company has budgeted to produce and sell 10,000 units of a product, the selling price and the variable cost per unit of which is Rs 20 and Rs 12 respectively. Fixed costs which are budgeted at Rs 60,000 for the period are likely to rise to Rs 70,000 if activity level goes beyond 11,000 units and fall to Rs 48,000, if the activity level is less than 9,000 units. It is also estimated that variable costs will fall by 5% per unit for all units, if the activity level goes beyond 10,000 units. If the actual results for the period are as given below:

(a) Prepare a fixed budget and a flexible budget;

237_Prepare a fixed budget and a flexible budget.png

(b) Show the usefulness of fixed budgeting and flexible budgeting from the point of view planning and control.


Related Discussions:- Prepare a fixed budget and a flexible budget

Transfer pricing, Transfer pricing sometimes entails using different transf...

Transfer pricing sometimes entails using different transfer pricing systems: one for tax purposes, and one for internal decision making, even though maintaining two systems can be

Special orders, Issa Company manufactures a personal computer designed for ...

Issa Company manufactures a personal computer designed for use in schools and markets it under its own label. Issa has the capacity to produce 25000 units a year but is currently p

Accounting concepts, implications of applying accounting concepts wrongly

implications of applying accounting concepts wrongly

Total annual inventory cost , Ross White's machine shop uses 2,500 brackets...

Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant by the year. These brackets are purchased from a supplier 100 miles

Service time-probability distribution curve, Service time-probability distr...

Service time-probability distribution curve A common example is that service times follow an exponential probability distribution i.e. y=e -x Service channels - t

Make or buy decisions under limiting factors, MAKE OR BUY DECISIONS UNDER L...

MAKE OR BUY DECISIONS UNDER LIMITING FACTORS One reason for buying products/services from another organisation is the scarcity of resources, so that the company may be unable t

The break even point in dollorsales for rice company, the break even point ...

the break even point in dollorsales for rice company is48,000 and the company's contribution margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much wou

Difference between budgetary control and standard costing, Difference betwe...

Difference between budgetary control and standard costing Budgetary control The budgets are prepared for the concern as a whole. The budgets are fixed on the basis of p

Simulation models, SIMULATION MODELS Simulation is a method of analyzin...

SIMULATION MODELS Simulation is a method of analyzing a system by experimentally duplicating its behavior. Management accountants can be able to make meaningful inferences conc

Write Your Message!

Captcha
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