Accounting 9706 · AS & A Level · Budgeting and budgetary control

Budgeting and budgetary control — practice question

Ella uses flexible budgets within her budgetary control system. The following information is provided for the year ended 31 March 2019.
(a)[2]

State two advantages for a business of using a budgetary control system.

(b)[8]

Calculate the flexed budget profit for the year ended 31 March 2019.

(c)[6]

Prepare a statement that shows the relevant variances and reconciles the flexed budget profit with the actual profit.

(d(i))[2]

Suggest what might have caused a favourable total direct material variance.

(d(ii))[2]

Suggest what might have caused an adverse total direct labour variance.

(e)[5]

Advise Ella whether she ought to continue flexing the budgeted data or not. Justify your answer.

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