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that Carmen\'s Cookies is preparing a budget for the month ending September 30.

ID: 2419877 • Letter: T

Question

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 are shown below. Then, managernent nsiders what the differences in costs will be between April and September EN'S COOKIES il Responsibility Center Retail Actual Costs For the Month Ending April 30 Actual (April) Food Flour Eggs Chocolate Nuts Other S 1,550 4,900 1.250 1.950 1,750 : Total Total food $11.400 Labor Manager Other S 2,900 1,150 Total labor Utilities Rent s 4,050 1.450 5,000 Total cookie costs $21.900 Number of cookies sold 24,500 Management expects cookie sales to be 26 peroent greater in September than in April, and it expects all tood oosts (eg. flour eggs) to be 20 peroent higher in September than in April because of the incrsase in cookie sales Manegement expects other labor costs to be 26 peroant higher in September than in April, partly because mare labor will be required in September and partly because employees will get a pay raise The maneger will get a pay raise that will incresse the salary from $2.900 in April to $3.150 in September Utilities will be é peroent 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 actust results occurred in September

Explanation / Answer

Budgeted Vs Actual Costs for the month ending September 30:

Actual

Budget

Difference

Food

     Flour

2169

1953 (1550 + (1550 * 26%))

-216

     Eggs

6581

6174 (4900 + (4900 * 26%))

-407

     Chocolate

1292

1575 (1250 + (1250 * 26%))

283

     Nuts

2362

2457 (1950 + (1950 * 26%))

95

     Other

2276

2205 (1750 + (1750 * 26%))

-71

     Total Food

14680

14364

-316

Labor

     Manager

3150

3150

0

     Other

1430

1449 (1150 + (1150 * 26%))

19

     Total Labor

4580

4599

19

Utilities

1827

1537 (1450 + (1450 * 6%))

-290

Rent

5000

5000

0

Total Cookie Cost

26087

25500

-587

Number of Cookies Sold

30870

30870 (24500 + (24500 * 26%))

0

Note: Adverse difference has been shown with minus sign

Actual

Budget

Difference

Food

     Flour

2169

1953 (1550 + (1550 * 26%))

-216

     Eggs

6581

6174 (4900 + (4900 * 26%))

-407

     Chocolate

1292

1575 (1250 + (1250 * 26%))

283

     Nuts

2362

2457 (1950 + (1950 * 26%))

95

     Other

2276

2205 (1750 + (1750 * 26%))

-71

     Total Food

14680

14364

-316

Labor

     Manager

3150

3150

0

     Other

1430

1449 (1150 + (1150 * 26%))

19

     Total Labor

4580

4599

19

Utilities

1827

1537 (1450 + (1450 * 6%))

-290

Rent

5000

5000

0

Total Cookie Cost

26087

25500

-587

Number of Cookies Sold

30870

30870 (24500 + (24500 * 26%))

0