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

Budgeting and budgetary control — practice question

Read the Source B1 in the Insert.
(a)[7]

Prepare a cost statement in columnar format that presents the master budget, the flexed budget and the actual result.

(b(i))[1]

Calculate the direct materials variance from the figures provided.

(b(ii))[4]

Analyse why the direct materials variance arose. Support your answer with calculations.

(c(i))[1]

Calculate the direct labour variance from the data given.

(c(ii))[4]

Analyse why the direct labour variance occurred. Support your answer with calculations.

(d(i))[1]

Calculate the total fixed overheads variance from the figures.

(d(ii))[1]

Calculate the fixed overheads expenditure variance from the information given.

(d(iii))[1]

Calculate the fixed overheads volume variance for the data given.

(e)[5]

Discuss whether the production manager ought to be fully accountable for the adverse variances in direct materials and direct labour. Justify your answer.

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