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    Problems On Flexible Budget

    Uploaded by

    safwanhossain
    This document provides information to prepare flexible budgets, performance reports, and express budgets in formula format for three companies - Tista Ltd., Karatoya Ltd., and Surma Ltd. It includes their budgeted and actual production levels and costs. The tasks are to prepare flexible budgets at different production levels, performance reports comparing budget to actual, and express the budgets in a formula format relating total cost to fixed cost and variable cost per unit.

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    © All Rights Reserved
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    Problems On Flexible Budget

    Uploaded by

    safwanhossain
    527 views3 pages
    This document provides information to prepare flexible budgets, performance reports, and express budgets in formula format for three companies - Tista Ltd., Karatoya Ltd., and Surma Ltd. It includes their budgeted and actual production levels and costs. The tasks are to prepare flexible budgets at different production levels, performance reports comparing budget to actual, and express the budgets in a formula format relating total cost to fixed cost and variable cost per unit.

    Original Title

    Flexible Budget MBA

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    This document provides information to prepare flexible budgets, performance reports, and express budgets in formula format for three companies - Tista Ltd., Karatoya Ltd., and Surma Ltd. It includes their budgeted and actual production levels and costs. The tasks are to prepare flexible budgets at different production levels, performance reports comparing budget to actual, and express the budgets in a formula format relating total cost to fixed cost and variable cost per unit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    527 views3 pages

    Problems On Flexible Budget

    Uploaded by

    safwanhossain
    This document provides information to prepare flexible budgets, performance reports, and express budgets in formula format for three companies - Tista Ltd., Karatoya Ltd., and Surma Ltd. It includes their budgeted and actual production levels and costs. The tasks are to prepare flexible budgets at different production levels, performance reports comparing budget to actual, and express the budgets in a formula format relating total cost to fixed cost and variable cost per unit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Problems on Flexible Budget

    Extra: 01
    You are given the following information relating to Tista Ltd.:
    Budget (At 100%) Actual
    Production in units 10,000 8,000
    Fixed Cost (Tk.) 4,00,000 3,80,000
    Variable Cost (Tk.) 6,00,000 5,20,000
    Required:
    a) Prepare Flexible Budgets for 80%, 90%, and 100% Production Levels;
    b) Prepare a Performance Report;
    c) Express Flexible Budget into Formula Format and calculate Budgeted Cost for
    8,500 units.

    Solution:

    Required: a)
    Tista Ltd.
    Flexible Budgets

    Particulars 80% Level 90% Level 100% Level


    Taka Taka Taka
    1. Production in Units 8,000 9,000 10,000
    2. a) Variable Cost 4,80,000 5,40,000 6,00,000
    b) Variable Cost Rate (2a ÷ 1) 60.00 60.00 60.00
    4. a) Fixed Cost 4,00,000 4,00,000 4,00,000
    b) Fixed Cost Rate (3a ÷ 1) 50.00 44.44 40.00
    6. a) Total Cost 8,80,000 9,40,000 10,00,000
    b) Total Cost Rate (4a ÷ 1) 110.00 104.44 100.00

    Page No. 01/03


    Required: b)

    Tista Ltd.
    Performance Report

    Particulars Budget Actual Variances (Taka)


    Taka Taka Favorable Unfavorable

    1. Production in Units 8,000 8,000 Nil Nil


    2. Variable Cost 4,80,000 5,20,000 Nil 40,000
    3. Fixed Cost 4,00,000 3,80,000 20,000 Nil
    4. Total Cost (2 + 3) 8,80,000 9,00,000 Nil 20,000

    Required: c)
    Expression of Flexible Budget into Formula Format:

    y = a + bx
    Where, y = Total Budgeted Cost = ?
    a = Fixed Cost = Tk.4,00,000
    b = Variable Cost per unit = Tk.60
    x = Budgeted Units = ?
    Therefore,
    y = Tk.4,00,000 + Tk.60x
    Budgeted Cost for 8,500 unit =
    y8,500 units = Tk.4,00,000 + Tk.60 × 8,500 units
    = Tk.4,00,000 + Tk.5,10,000 = Tk.9,10,000

    Extra: 02 (Home Task)


    You are given the following information relating to Karatoya Ltd.:
    Budget (At 100%) Actual
    Production in units 10,000 8,000
    Variable Cost (Tk.) 2,00,000 1,75,000
    Fixed Cost (Tk.) 1,00,000 1,00,000
    Required:
    a) Prepare Flexible Budgets for 80%, 90%, and 100% Production Levels;
    b) Prepare a Performance Report;
    c) Why ‘Flex’ in the Flexible Budget is confined to the Variable Cost only?

    Page No. 02/03


    Extra: 03 (Home Task)
    You are given the following information relating to Surma Ltd.:
    Budget Actual
    Production in units 10,000 8,000
    Variable Cost (Tk.) 4,00,000 3,75,000
    Fixed Cost (Tk.) 2,00,000 2,00,000
    Required:
    a) Prepare a Production Budget for 10,000 units of Production;
    b) Prepare a Revised Production Budget based on Actual Production;
    c) Express the above Budget into Formula Format;
    d) Prepare Performance Report.

    

    Page No. 03/03

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