Accounting for Managers: Interpreting accounting information for decision-making

BUDGETARY CONTROL 229

Table 15.2 Budget v. actual report

Budget Actual Variance

Sales units 10,000 9,000

Selling price

Revenue 1,700,000 1,575,000 125,000

Variable costs

Materials

Plastic 30,000 26,600 3,400

Metal 20,000 20,000 0

Wood 30,000 26,600 3,400

Labour

Skilled 900,000 838,750 61,250

Semi-skilled 225,000 195,000 30,000

Variable overhead 300,000 283,250 16,750

Total variable costs 1,505,000 1,390,200 114,800

Contribution 195,000 184,800 10,200

Fixed costs 125,000 130,000 −5,000

Net profit 70,000 54,800 15,200

Table 15.3 Flexible budget

Original

budget

Flexed

budget

Actual Variance

Sales units 10,000 9,000 9,000
Selling price

Revenue 1,700,000 1,530,000 1,575,000 −45,000

Variable costs
Materials
Plastic 30,000 27,000 26,600 400
Metal 20,000 18,000 21,000 −3,000
Wood 30,000 27,000 26,600 400
Labour
Skilled 900,000 810,000 838,750 −28,750
Semi-skilled 225,000 202,500 195,000 7,500
Variable overhead 300,000 270,000 283,250 −13,250

Total variable costs 1,505,000 1,354,500 1,391,200 −36,700

Contribution 195,000 175,500 183,800 −8,300
Fixed costs 125,000 125,000 130,000 −5,000

Net profit 70,000 50,500 53,800 −3,300