8) Below is a performance report that compares budgeted and actual profit of Boy

Question

8) Below is a performance report that compares budgeted and actual profit of Boyles Beer for the month of April:

Budget Actual Difference
Sales $200,000 $202,000 $2,000
Less:
Cost of ingredients: 162,000 166,000 4,000
Salaries: 31,000 31,200 200
Controllable profit: $47,000 $44,800 ($2,200)
In evaluating the department in terms of its increases in sales and expenses, what will be most important to investigate?

A) Sales
B) Cost of ingredients
C) Salaries
D) All three components have equal importance.

Explanation / Answer

In evaluating the department , we need to consider all the parameters namely the - A ) Sales B) Cost of ingredients C) Salaries Hence the correct answer would be Option - D D) All three components have equal importance.

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