(A) Budgets play an essential role for organizations of all sizes and forms. Suppose you
are the owner of a frozen meat importer and is going to prepare the budget for the
coming year, describe the procedures of preparing your budget. (8 marks)
(B) Below is the actual result compared with budget for Tasty Frozen Meat Company
Limited for year ended 31st December 2020. Please calculate the variance, that is,
cells (i), (iii) (v) and (vii), for the budget comparison and indicate whether it is
fourable or adverse, that is, cells (ii), (iv), (vi) and (viii). (8 marks)
Budget Comparison for Tasty Frozen Meat Co. Ltd.
For the Year Ended 31st December 2020
Revenue
Budget Actual Variance
178,500 160,000 (i)
Cost
71,400 60,800 (iii)
Gross Margin
107,100 99,200 (v)
Overheads
12,852 13,500 (vii)
Profit before Tax 94,248 85,700
(C) Variance or deviation is the term used in budget monitoring. Suppose in your
budgeting monitoring, you found that the actual result for \"expense in food materials\"
is greater than the budgeted figure. What does it mean and what needs to be
investigated? (9 marks)
