Coronado Industries prepared a 2022 budget for 102000 units of product. Actual production in 2022 was 220000 units. To be most useful, what amounts should a performance report for this company compare? The actual results for 220000 units with the original budget for 102000 units. The actual results for 220000 units with a new budget for 220000 units. The actual results for 220000 units with last year's actual results for 223400 units. All of these comparisons are equally useful.
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The company prepared a budget for 102,000 units, but actual production was 220,000 units. Show more…
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Aparna S.
Akash M.
c. Ramuthunyana (Pvt) Ltd. is comparing budget and actual data for the last four months. Budget Actual P P Sales 950 000 922 500 Cost of sales Raw materials 133 000 130 500 Direct labour 152 000 153 000 Variable production overheads 100 700 96 300 Fixed production overheads 125 400 115 300 438 900 427 400 The budget was prepared based on 95 000 units produced and sold, but actual production and sales for the four months period were 90 000 units. Ramuthunyana (Pvt) Ltd uses standard costing and absorbs fixed production overheads on a machine hour basis. A total of 28 500 standard machine hours were budgeted. A total of 27 200 machine hours were actually used in the period. Required: Prepare a revised budget at the new level of activity using a flexible budgeting approach (8 marks)
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