Page 19 - PM Integrated Workbook 2018-19

A revision of Management Accounting (MA) topics

Original Flexed Actual Meaningful
fixed budget results variance =
budget flexed –
actual
(in $)

Based on production/ 10,000 units 12,000 units 12,000 –
sales of units

Sales 10,000 units 12,000 units $125,000 $5,000 Fav
× $10 per × $10 per
unit = unit =
$100,000 $120,000

Variable production 10,000 units 12,000 units $40,000 $4,000 Adv
cost × $3 per unit × $3 per unit
= $30,000 = $36,000

Fixed production cost 10,000 units As per $9,000 $1,000 Fav
× $1 per unit original
= $10,000 budget =
$10,000
Profit $60,000 $74,000 $76,000 $2,000 Fav

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