Question

Assume that Carmen's Cookies is preparing a budget for the month ending September 30. Management prepares the budget by starting with the actual results for April that is shown below. Then, management considers what the differences in costs will be between April and September.

CARMEN'S COOKIES
Retail Responsibility Center
Actual Costs
For the Month Ending April 30
	Actual
	(April)
Food
Flour	$	2,100
Eggs		5,200
Chocolate		2,000
Nuts		2,000
Other		2,200
Total food	$	13,500
Labor
Manager	$	3,000
Other		1,500
Total labor	$	4,500
Utilities		1,800
Rent		5,000
Total cookie costs	$	24,800
Number of cookies sold		32,000

Management expects cookie sales to be 20 percent greater in September than in April, and it expects all food costs (e.g., flour, eggs) to be 20 percent higher in September than in April because of the increase in cookie sales. Management expects “other” labor costs to be 25 percent higher in September than in April, partly because more labor will be required in September and partly because employees will get a pay raise. The manager will get a pay raise that will increase the salary from $3,000 in April to $3,500 in September. Utilities will be 5 percent higher in September than in April. Rent will be the same in September as in April.

Now, fast forward to early October and assume the following actual results occurred in September:

Required:

a. Prepare a statement that compares the budgeted and actual costs for September. (Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.)

Answer 1

CARHEN S CooKIES Amount Food Floor ( 2100 ×1,20 12:00 Rooo x 1.20) choCotab looo x 120 2640 Total food a) 16.200 Monajer 3500 5,3 +5 Kent Number ef ookitg sod38 (32,000x 1.20)