For January 2024, present the fixed budget statement and the flexible budget statement in columnar form. Include the fixed budget profit or loss for the month and the flexible budget profit or loss for the month.
Calculate the direct material price variance for the period.
Calculate the direct material usage variance for the period.
Calculate the direct labour rate variance for the data given.
Calculate the direct labour efficiency variance for the data.
Explain why the fixed overhead volume variance turned out adverse. Your answer should take account of the sub-variances of the fixed overhead volume variance, although no calculation of them is needed.
Advise the directors whether the company ought to begin preparing budgets for trade receivables and trade payables. Give reasons for your answer.