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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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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 ne
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a) 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 customers 1280hours / 2 average hours = 640 customersSales = 640 * $80=$51,200 Salaries = $1500 * 8 employees = $12,000Commissions =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 hoursCustomers = 725 customers Sales = = 725 * $80= $58,000Salaries = $1500 * 9 employees = $13,500Commissions =725 *$20=$14500Commissions rate = 25 % of new subscriber’s billing amount = $80 * 25/100=$20c) 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.

Answered Same DayDec 26, 2021

Solution

David answered on Dec 26 2021
84 Votes
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. The performance in revenue and net income is...
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