Tutorial 2b - Budgetary Control.pdf

Each employee works a basic 40 hours a week and is

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Each employee works a basic 40 hours a week and is paid RM8.50 per hour for the four weeks of May. Security costs were estimated at 40% of basic wages of the production employees. A bonus, shared amongst the production employees was payable if production exceeded 150 kgs. The rate of the bonus depending on the output achieved as follows: Output Rate per kg 150 kg 199 kg RM4 200 kg 249 kg RM8 More than 250 kg RM12 2. The cost of the fuel is RM85 per liter (1 kg used 1 liter) 3. Consumables are RM11 per kg. 4. Power comprised a fixed charge of RM500 per month plus RM5 per kg for every kg produced. 5. Divisional overheads, plant maintenance and central services are fixed costs.
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8 Required: a. Prepare a revised Performance Report for Reclamation Division that will be more meaningful to the management of Power Viking Company. Show all workings. (10 marks) b. Identify THREE (3) behavioral problems associated with budgetary control. (5 marks) c. Discuss TWO (2) advantages of participative budgeting. (5 marks) (Total: 20 marks)
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