Eggscell Ltd has produced budget and actual information for one of its business units for the previous month. This information is shown in . Eggscell Ltd.
|
Budget |
Actual |
|
|
Analysis of labour |
||
|
Number of hours |
10,000 |
9000 |
|
Average rate per hour |
$75 |
$80 |
a. Show how a traditional budget versus actual variance report would be presented to the manager of this business unit.
b. Use a flexed budget to present an actual versus budget comparison.
c. Explain how the use of a flexed budget provides variance information that is more meaningful to managers.