XYZ company had budget sales of £120,000,direct materials of £40,000 and direct labour of £30,000.Actual sales where 25% up on budget.Calculate the flexed budget figures for XYZ company.

Question

Quizplus · Accepted Answer

To get the flexed budget figures, we first need to calculate the budgeted sales, materials and labor based on the actual sales. As the actual sales were 25% up on budget, the budgeted sales would have been (£120,000/100)*125 = £150,000. 
Similarly, the budgeted direct materials and labor would have been: 
Direct materials = (£40,000/£120,000)*£150,000 = £50,000
Direct labor = (£30,000/£120,000)*£150,000 = £37,500
Therefore, the flexed budget figures for XYZ company would be: 
Sales £150,000, direct materials £50,000 and direct labour £37,500. Hence, option C is the correct answer.

XYZ Company Had Budget Sales of £120,000,direct Materials of £40,000