财政预算 张琳.doc

The International College of Xiamen University 10 SQA HND Business with Accounting Preparing Financial Forecast Unit Name: Preparing Financial Forecasts Unit Code: DE3J 35 Name: Zhang, Lin Student ID No.: 115124722 Supervisor: Li，Li Submission Date: 10/12/12 Word count: 931 Introduction This report is to research the Tricol plc which is making a range of furniture and kitchenware. According to these variances I will give some possible reason and recommendations. Part A Possible reasons From the appendix 2, Direct Material Total Variance is ￡2,400(F), it is means actual direct material cost is lower than budget. The total material variance is favorable. The possible reason may the company uses a new expensive material with less wastage in the manufacturing process. From the appendix 2, Direct Material Usage Variance is ￡8,000 (F). The direct material budget volume is 6400kg，the actual volume is 5600kg. So there is 800kg variance which is favorable. The possible reason is the company updated to production equipment and the higher utilization ratio of raw materials now, so it reduce to the material wasted. Form the appendix 2, Direct Material Price Variance is ￡5,600 (A). The direct material budget price is ￡10 per kg and the actual price is ￡11per kg, this figure is adverse. The possible reason may the company bought a new higher grade materials increased unit price, it also change of suppliers, they lost their volume discount. Form the appendix 2, Direct Labor Total Variance is ￡6,400(A). The budget direct labor hours are 3,200hrs and the actual labor hours are 3,520hrs. There are more 320hrs needed than the budget, this is adverse. The labor cost is higher than expected. The possible reason is because of changing the new production equipment; workers are unskilled to use the machine. Form the appendix 2, Direct Labor Rate Variance is ￡3,520 (A). The budget direct labor hours rate is ￡9 per hour, the actual hours rate is ￡10 per hour. It is a