Page 371 - PM Integrated Workbook 2018-19

Chapter 15

Answers

Chapter 1

Example 1

A business has prepared the following standard cost card based on producing
and selling 10,000 units per month:

$
Selling price 10

Variable production cost 3
Fixed production cost 1

–––
Profit per unit 6

Actual production and sales for month 1 were 12,000 units and this resulted in
the following:

$000
Sales 125

Variable production costs 40
Fixed production costs 9

–––
Total profit 76

Using a flexible budgeting approach, prepare a table (next page)
showing the original fixed budget, the flexed budget, the actual results
and the total meaningful variance.

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