(a)[4]
Explain two reasons why a business might carry out variance analysis.
(b)[2]
State how a fixed overhead capacity variance is calculated.
(c)[5]
Prepare the flexible budget statement for August.
(d)[3]
Prepare a statement that reconciles the flexible budget profit in (c) with the actual profit.
(e)[4]
Explain the likely causes of the favourable direct labour variance of $1980$ by referring to the two sub-variances in the analysis.
(f)[7]
Advise the directors on which option they should choose. Justify your answer.