Actual budget:9 employees worked * 160 hours per employee = 1440 hoursCustomer = 725Sales = 725 *...

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Actual budget:9 employees worked * 160 hours per employee = 1440 hoursCustomer = 725Sales = 725 * $80= $58,000Salaries =$1500 * 9 employees =$13500Commissions = 725 * $20 = $14500Commissions rate = 25 % of new subscriber’s billing amount = $80 * 25/100=$20Over time:1580 hours worked – 1280 budgeted hours =300 hours – 160 hours for extra one employee as ninth employee worked in actual = 140 hours considered as over timeOver time rate = $12Over time salaries = $12 * 140 = $1680Static budget:8 employees worked * 160 hours per employee =1280 hoursCustomers = 640 customers1280hours / 2 average hours = 640 customersSales = 640 * $80=$51,200Salaries = $1500 * 8 employees = $12,000Commissions =640 *$20=$12800Commissions rate = 25 % of ne
	
Document Preview: a) Actual budget:9 employees worked * 160 hours per employee = 1440 hoursCustomer = 725Sales = 725 * $80= $58,000Salaries =$1500 * 9 employees =$13500Commissions = 725 * $20 = $14500Commissions rate = 25 % of new subscriber’s billing  amount = $80 * 25/100=$20Over time:	1580 hours worked – 1280 budgeted hours =300 hours – 160 hours for extra one employee as ninth employee worked in actual = 140 hours considered as over timeOver time rate = $12Over time salaries = $12 *   140 = $1680Static budget:8 employees worked * 160 hours per employee =1280 hoursCustomers = 640 customers 1280hours / 2 average hours = 640 customersSales = 640 * $80=$51,200  Salaries = $1500 * 8 employees = $12,000Commissions =640 *$20=$12800 Commissions rate = 25 % of new subscriber’s billing amount = $80 * 25/100=$20_____________________________________________________________________________b)Flexible budget:9 employees worked * 160 hours per employee =1440 hoursCustomers = 725 customers Sales = = 725 * $80= $58,000Salaries = $1500 * 9 employees = $13,500Commissions =725 *$20=$14500Commissions rate = 25 % of new subscriber’s billing amount = $80 * 25/100=$20	c)  When I saw static budget first then I saw flexible budget it indicates there was no extra actual revenues has raised by the company but extra actual expenses made as shown. Sales revenues and all expenses amount except overtime are same figures used for actual and flexible budget.

David · Accepted Answer

MEMORANDUM 
 To: Management 
 Cc: 
 From: 
 Date: 
SUBJECT: Cellular First’s Performance 
(a) 
As the performance of the business, there is increase in the sales revenue. The predetermined 
static budget is 51,200. The positive variance of 6800 making this business favourable, But 
among the six prominent factors of the company three of them are unfavourable and two are 
in favour. The unfavourable constraints are in the form of expenses to the employees and it 
can be managed.

Actual budget: 9 employees worked * 160 hours per employee = 1440 hours Customer = 725 Sales = 725 * $80= $58,000 Salaries =$1500 * 9 employees =$13500 Commissions = 725 * $20 = $14500 Commissions...

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