If you were the chief executive of Baxter Ltd, what attitude would you take to the overall variance between the budgeted profit and the actual one?

How would you react to the five individual variances that are the outcome of the analysis shown in the solution to Activity 9.12?

Data from Activity 9.12

Compare the sales revenue, raw materials and labour values between the flexed budget and the actual results and reconcile the original budget and the actual profit for Baxter Ltd. Remember that the sales volume variance is also part of the difference.