Budgeting

This exercise should be completed after reading pages 530-533 (Budgetary control: statement of profit or loss) of Chapter 14.

Anna: Budgeted v Actual Statements of Profit or Loss for March

Numbers in brackets are classified as unfavourable, those variances that have reduced the budgeted profit; whereas figures without brackets are favourable, those variances that have increased the budgeted profit.

. Using Anna's budget and actual figures for March in the table, suggest reasons for the changes in the following income and expenditure:
- Sales
- Direct materials: wood and other
- Direct labour
- Electricity
We already know that machinery and tools depreciation is higher as Anna paid more for her machinery and tools which resulted in a higher depreciation charge for the month (pages 530-533, Budgetary control: statement of profit or loss)).
When you have considered how you would answer the question select Yes to view the correct answer.