Presentation Ma

7/29/2019 Presentation Ma

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Groups MembersNik Hassan Syukri Nik Zainal RashedShee Mei ThengEmilya Mazrina Bt Slamat GramonoNorhidayah Bt Ibrahim


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Term that refers, in business finance, topadding the budget by overestimatingexpenses and underestimating revenue orsales when developing a budget.

Budgetary slack may occur if a manager isfearful of termination and pads the budgetto avoid termination.


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The process of planning implies the existenceof objectives and is used as a tool or techniquefor achieving the objectives.

Objectives should not only be imposed onsubordinates but should be decidedcollectively (teamwork-junior subordinate &senior,manager).


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Practice of examining the financial andoperational results of a business, and onlybringing issues to the attention ofmanagement if results represent substantialdifferences from the budgeted or expectedamount

Purpose- only bother management team

with the important varience


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Cash Budget for year ended 2013, 2014, and 2015

2013

2014

2015

Direct Material 20,528 21,634 21,176

Direct Labour 75,700 80,999 86,669

Variable Overhead 25,265 27,084 41,321

Fixed overhead

- service 30% 15,430 16,355 26,168

- head office 50% 25,717 27,258 43,613

Total 162,640 173,330 218,947

Anwers :


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Production cost per unit

Direct Material 75

Direct Labour 270

Overhead cost [(75x20%)+270]=285

- variable overhead [(15x30%)+(270x33.33%)] 94.50

- fixed overhead (285-94.50) 190.50

Quantity of houses(for each year) Units

Estate - A 500x30% 150

- B 600x20% 120

Total 270

Production cost for 270units

Direct Material 20,250

Direct Labour 72,900

Variable overhead 25,515

Fixed overhead 51,435


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Total cash flow for the year 2013

Accrued Current year Total

Direct Material 2,100 18,428 20,528

Direct Labour 2,800 72,900 75,700

Variable Overhead 600 24,665 25,265

Fixed overhead - service 30% 15,430

- head office 50% 25,717

Total cash flow for the year 2014

Accrued Current year Total

Direct Material 1,822 19,812 21,634

Direct Labour - 80,999 80,999

Variable Overhead 850 36,234 27,084

Fixed overhead - service 30% 16,355

- head office 50% 27,258


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Total cash flow for the year 2015 Accrued Current

yearTotal

Direct Material 1741 19,435 21,176

Direct Labour - 86,669 86,669

Variable Overhead 871 40,450 41,321Fixed overhead - service30%

26,168

- headoffice 50%

43,613


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2(b.ii) Other factor to consider :

1.Material qualities usage

2.Labour effieciency

3.Performance history of company


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Standard Product Cost Per Unit

()

Direct Material-Wals (15x60) 900

-Lops (8x75) 600

Direct Labor (60x10.50) 630

Fixed O/head (504,000/12month/200) 210

2,340


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Material Price Variance

WALS = (AP-SP) X AQ

= (57-60) X 3,000

= 9,000 (F)

LOPS = (AP-SP) X AQ

= (81-75) X 1,000

= 6,000 (A)


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Material Usage Variance

WALS = (AQ-SQ) SP

= (3,000-[18015])60

= (3,000u-2,700u)60= 18,000 (A)

LOPS = (AQ-SQ) X SP

= (1,000u-[1808])75

= (1,000u-1,440u)75

= 33,000 (F)


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Direct Labour Efficiency= (SH-AH) SR

= ([60h200]-11,700h)10.50

= (12,000h-11,700h)10.50

= 300h10.50

= 3,150 (F)

Wage Rate Variance

= (SR-AR) AH

= (10.50-9.60) 11700h= 10,530 (F)


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Fixed o/head Expenditure= (BFO-AFO)

= ([504,000/12]-42,600)

= 600 (A)

Volume Variance

= (AP-BP)SR

= (180u-200u)210 SR=Budget Fixed O/head= 4,200 Budgeted Activity

=504,000/2400= 210


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() () ()Budgeted Profit 66,000

Direct Cost Variances:

Materials Price-Wals 9,000 (F)

-Lops 6,000(A) 3,000 (F)

Materials Usage-Wals 18,000(A)-Lops 33,000(F) 15,000(F)

Labour-Rate 10,530(F)

-Efficiency 3,150(F) 13,680(F)

Manufacturing o/head

variances

Fixed expenditure 600 (A)

Volume Variance 4,200(A) 4,800(A) 26,880

Actual Profit 39,120


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() () ()Budgeted Profit 66,000

Direct Cost Variances:

Materials Price-Wals 9,000 (F)

-Lops 6,000(A) 3,000 (F)

Materials Usage-Wals 18,000(A)

-Lops 33,000(F) 15,000(F)

Labour-Rate 10,530(F)

-Efficiency 3,150(F) 13,680(F)

Manufacturing o/headvariances

Fixed expenditure 600 (A)

Volume Variance 4,200(A) 4,800(A) 26,880

Actual Profit 39,120


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