Case Study: Background Proven Patio FurnitureLtd manufactures patio tables for residential and restaurant uses.

Required: 

PART A:Operating Budgets (60 marks)

Prepare the followingbudgets for Proven Patio Furniture Ltd, for April, 2016 both in dollars andunits as required (Referring Tables: 1-6).

       I.           Revenues Budget

    II.           Production Budget

 III.           Direct Materials Usage Budget

 IV.           Direct Materials Purchases Budget

    V.           Direct Manufacturing Labour Budget

 VI.           Manufacturing Overhead Budget

VII.           Ending Inventories Budgets (DirectMaterials and Finished Goods)

VIII.           Cost of Goods Sold Budget

 IX.           Budgeted Income Statement

All budgets andsupporting schedules must be neatly presented (students are encouraged to useExcel workbook to do all the calculations). Cells and worksheets must be linked via formulas/references wherever possible(Important!!). 

PART B: Variance Analysis (40 marks)

1.     Calculate the flexible budget variancesand sales volume variances for the quarter ending June 30, 2017 based on theinformation provided in the Table 7 in both dollars and percentages.

2.     Write a report (750 words) which analyses thevariances calculated in requirement 1. Your report must include the following:

·        Potential causes of any variance above5% including both favourable and unfavourable variances

·        Recommend possible courses of action toaddress the potential causes of significant variances, where this is within thecontrol of Proven Patio Furniture Ltd.

PART B (2) Report should be within the word limit of 750 words (± 10%)