Assignment on Preparing a Flexible Budget

Added on - 21 Apr 2020

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V2017.T4. 1.0FNS50215Diploma of Accounting/ FNSACC507/ 2017/ T4/ Assessment ToolPage1of10
Assessment2Question:1 - Preparing a Flexible BudgetYou are required to use the following information, for the coming year, toprepare a flexible manufacturing overhead budget showing budgetedoverheads at 80%, 100% and 120% of the normal production activity level. Thenormal production activity level is assumed to be 100,000 units.Budgeted normal production activity level overheads are as follows:$Indirect materials15,000Factory rent20,000Factory manager’s salary6,000Maintenance of machinery5,000Electricity2,500Depreciation – machinery3,500Workers compensation insurance1,500Insurance – machinery450Depreciation – building1,250V2017.T4. 1.0FNS50215Diploma of Accounting/ FNSACC507/ 2017/ T4/ Assessment ToolPage2of10
Additional informationa)Indirect materials cost varies directly with production activity.b)Maintenance of machinery is dependent upon hours worked by themachines (all units are uniform in terms of machine hours).c)Electricity is a constant percentage of the total units produced.d)Machinery is depreciated on a straight-line basis.e)Workers compensation insurance is a percentage of direct labour andtherefore varies directly with production activity.Answer:Calculation of flexible budget80%100%120%Units80000100000120000Indirect Material120001500018000Factory rent200002000020000Factory manager's salary600060006000Maintenance of machinery400050006000Electricity200025003000Depreciation - Machinery350035013502Workers compensation insurance120015001800Insurance - Machinery450450450Depreciation - Building125012501250Question: 2 - In accounting for and controlling labour costs, what is the function of:a)The timekeeping department?The main function of the timekeeping department of the company ismanaging the labor cost of the company through using the followingfunctions:Maintain the regularity and disciplinePreparation of pay rollsV2017.T4. 1.0FNS50215Diploma of Accounting/ FNSACC507/ 2017/ T4/ Assessment ToolPage3of10
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