TUMA KA Municipal Council uses a feed forward approach in formulating its budget for performance analysis purposes . The following are the estimated details for the forth coming financial year - 1 January 2022 to 31 December 2022:
Production and Sales in units - 100000 units ( 80 % capacity)
K000
Sales Revenue 540000
Cost:
Direct Material 80000
Direct Labor 110000
Variable overheads 40000
Production overheads (hybrid cost, 70% variable
the rest fixed ) 60000
Rent (fixed ) 10000
Depreciation (fixed) 8000
Management Salaries (fixed) 70000
Other overheads (fixed) 65000
REQUIRED
Flex the budget to 70%, 60%, 90% and 100 % activity levels and. Determine the profit / (loss ) for the fixed budget ( 80% ) and flexed Budgets