Software Associates

Topics: Cost, Costs, Variable cost Pages: 4 (1691 words) Published: March 28, 2013
Assignment 1: Variance Analysis Report
In order to perform a variance analysis report Jenkins calculated the actual revenues and expenses and found the difference which was $296,610 in profits. Then Jenkins did the same with budgeted values and found the budgeted profits to be $606,350. The variance amount in turn is $309,960 under budget. Also, the variance amount for revenues is $32,100. This number is favorable due to the fact that they made more than what they had budgeted for. But on the contrary, the variance amount for expenses was $342,060, which was unfavorable because they spent far more than what they had budgeted for. This information would not be sufficient in order to explain to Norton why their profit percentage is nearly half of what they budgeted. This variance analysis report only shows the raw numbers and not any details to why they spent more on expenses than what they budgeted. Jenkins would have a difficult time explaining details to why they went over budget. She would need to show him a detailed expense report of the budgeted items and the actual amount they spent on the items. Then she would have to clearly define which items went over budget and why. This variance analysis report would not help Jenkins in the 8 am meeting she has would need to provide more information. Assignment 2: Preparing the Budget: Variance Analysis Report In order to provide more information to Norton, Jenkins will need to perform a variance analysis report. Jenkins would be required to use the numbers provided in Exhibit 2. She will use the numbers on the budget and actual income statement to identify revenue quantity, which is provided in number of hours. She will then identify actual and expected quantity. The actual number of consultant hours exceeded the expected number of consultant hours. Then Jenkins subtracted the actual amount of hours from the expected amount of hours and then multiplied by the expected labor price of $90. Jenkins found that Software...
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