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September 22, 2020

Assignment Question(s): Q1. ABC Inc. Has the flexible budget

Assignment Question(s): Q1. ABC Inc. Has the flexible budgeted income statement for the period ended in December 31, 2019 at 600 units sold as follows: Sales (100 price per unit*600 units)600,000 Cost of gold sold (600*50)300,0000Gross profit300,000Operating expenses:Wages and salaries (10,000+ 10*600) 16,000Supplies (5000+2*600)6,200Insurance3,000Total expenses25,200Net operating income274,800Cost of gold sold300,000Gross profit350,000Operating expenses:Wages and salaries20,000Supplies)7,000Insurance3,000Total expenses30,000Net operating income320,000 Whereas the actual income statement for the period ended in December 31, 2019 at 600 units sold as follows: Sales650,000 Required: compute the variance and specify whichever favorable and unfavorable variance is. Answer: Q2. Explain the inefficiencies of static budget and explain how did flexible budget overcome the these inefficiencies Q3. List capital decision method and explain the criteria accepting or rejecting capital project under the present value methodQ4. Wages and salaries amounted to SR 30,000 and the flexible budget used quantities sold as cost driver for estimating wages and salaries as follows: SR5000+ SR 5 per unit sold. How much variance is for wages and salaries if the actual level of activity were at 3000 units sold?A-SR 10,000 unfavorable varianceB-SR 10,000 favorable varianceC-SR 20,000 favorable varianceD-SR 20,000 unfavorable variance

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