Activity 7.14
The following are the budgeted and actual income statements for Baxter Ltd for the month of July:
\begin{tabular}{|c|c|c|}
\hline Output (production and sales) & \begin{tabular}{l}
Budget \\
\( \frac{1,000}{£} \) units
\end{tabular} & \begin{tabular}{l}
Actual \\
\( \frac{1,050}{£} \) units
\end{tabular} \\
\hline Sales revenue & 100,000 & 104,300 \\
\hline Raw materials & \( (40,000)(40,000 \) metres \( ) \) & \( (41,200)(40,500 \) metres) \\
\hline Labour & \( (20,000)(2,500 \) hours \( ) \) & \( (21,300)(2,600 \) hours \( ) \) \\
\hline Fixed overheads & \( (20,000) \) & \( (19,400) \) \\
\hline Operating profit & 20,000 & 22,400 \\
\hline
\end{tabular}
Produce a reconciliation of the budgeted and actual operating profit, going into as much detail as possible with the variance analysis.
