Budget Analysis

Topics: Pro forma, Revenue, Analysis of variance Pages: 5 (742 words) Published: May 2, 2013
BUDGET MANAGEMENT ANALYSIS

To have a basis in illustrating the analysis of variance or difference between budgeted and actual figures, the budget of a sampled (unknown) company was utilized (http://www.smallbusinessnotes.com/business-finances/budgeting-systems.html).

| | | | | | | | | | | | | | | | | | | | | | | | | |Sample Company | | | | | |Budget | | | | | |January 1, xxxx to December 31, xxxx | | | | | |  |  |  |  | | |Category |Actual |Budget |Difference | | | |Net Sales |385,400 |300,000 |85,400 | | |Cost of Goods | | | | | | | | Merchandise Inventory, January 1 |160,000 |160,000 |0 | | | Less Inventory, December 31 |100,000 |120,000 |-20,000 | | |  Cost of Goods Sold |182,500 |132,000 |50,500 | | |  Gross Profit |202,900 |168,000 |34,900 | | |Interest Income | 500 | 700 | (200) | | |Expenses | | | | | |

Net Income |$69,210 |$61,850 |$7,360 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

VARIANCE ANALYSIS:

1. There was a 28.47% increase in sales.

This would indicate marketing effectiveness.

2. Purchases increased by 33.33%.

Purchases increased by 33.33%, indicating a possibility that the company must have purchased additional raw materials to cope with increased volume of sales...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Master Budget Analysis
  • Budget Management Analysis Essay
  • Cafr – Budget Analysis Essay
  • Budget Management Analysis Essay
  • Budget Essay
  • Essay on Budget Management and Variance Analysis
  • Pa581 Budget Analysis Essay
  • Essay on Flexible Budgets

Become a StudyMode Member

Sign Up - It's Free