short report see below

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Question 12 You are employed as the assistant accountant in the widgets division of Gregson PLC. Set out below is the operating statement for the division. Original Flexed Actual Total Price Efficiency Budget Budget Results Variance Variables Variances Units sold 208,000 316,800 316,800 0 Materials consumed 864,000kgs 950,400kgs 760,320kgs 190,080kgs Direct labour hrs 28,800 31,680 33,264 (1,584) £ £ £ £ £ £ Sales revenue 1,152,000 1,267,200 1,191,168 (76,032) (76,032) Variable costs Materials 648,000 712,800 608,256 104,544 (38,016) (142,560) Labour 230,400 253,440 282,744 (29,304) (16,632) (12,672) Contribution 273,600 300,960 300,168 (792) Sales volume contribution variance £18,240 Note: Adverse variables are shown in brackets. Required: Write a short report to the General Manager on the results. a) Your report should explain what each variance reveals about the overall divisional performance, and clearly identify the responsible manager. b) Choose any eight variances and suggest why they may have occurred. c) Comment on the effects of the possible actions that departmental managers could take to reduce adverse variances and capitalize on favourable variances.

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