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 SeptemberExplanation / 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
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