Question

QUESTION 45 - Practical Activity The following is a typical Variance Report. Complete the table, analyse the results and comment on the variance report.

Answer 1

Formulaes for Variance amount & Percentage	For Amount	For Percentile(%)
Variance for Cost	(Budget-Actual)	{(Budget-Actual)/Budget}*100
Variance for Revenue	Actuals-Budget	{(Actuals-Budget)/Budget}*100

ITEM	BUDGET	ACTUAL	VARIANCE	%VARIANCE
SALES REVENUE
Product A	100000	140000	40,000	40%
Product B	30000	27000	-3000	-10%
Total	130000	167000	37,000	28.46%
COSTS
WAGES	30000	35000	-5000	-16.67%
Rent	12000	12000	0	0
Marketing	15000	20,000	-5000	-33.33%
Telephone	5000	4000	1000	20%
Office equipment	20000	20000	0	0.00%
Printing	3000	4000	-1000	-33.33%
Sundry	2000	3000	-1000	-50%
Total	87000	98000	-11000	-12.64%
Profit	43000	69000	26000	60.47%