# Financial Performance

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* AAT LEVEL 4

Diploma in accounting
Financial performance (FPFM)
Assignment 1
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*
FPFM Assignment 1
* The total costs of a business, which are semi-variable, at two levels of output are shown below:
| 20,000 units£ | 25,000 units£ |
Total cost | 135,000 | 177,500 |
* The fixed element of the cost steps up by £25,000 at an output level of 23,000 units.
* The variable cost per unit is £
.
* The fixed cost before the ‘step’ is £
.
* The fixed cost after the ‘step’ is £
.
* A business has prepared two sets of budgeted costs at two different levels of production as follows:
| Budget for 50,000 units | Budget for 55,000 units |
| £ | £ |
Raw materials | 37,500 | 41,250 |
Labour | 30,000 | 33,000 |
Production overheads | 25,000 | 26,500 |
| | |
Total cost | 104,500 | 112,750 |
* By identifying the behaviour of each cost, calculate the total costs if a budget were produced for a production volume of 53,500 units.
| Cost behaviour | Calculation | Budget for 53,500 units |
| | | £ |
Raw materials | | | |
Labour | | | |
Production overheads | | | |
Total cost | | | |
*
*
* A company absorbs fixed overheads on a per unit basis. The budgeted and actual results are as follows:
| Budget | Actual |
Fixed overheads | £115,599 | £109,456 |
Units | 124,300 | 121,600 |
* The under/over-absorption of fixed overheads is £
under/over
absorbed.