Matt Lehti owns the Zap Record Shop. He is in the process of examining the following performance report:

Matt is very pleased that the company had favorable variances for sales and income.
However, he finds the sizable unfavorable variance for cost of goods sold very disturbing.
He is preparing himself for a serious discussion with the purchasing agent who is responsible for purchasing the merchandise sold.
Required: Assume that Matt Lehti has asked you for assistance in preparing for the meeting with the purchasing agent. Prepare a memo to Matt that provides him with any information you think would be helpful.

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Sales Cost of Goods Sold Selling and Admin. Expense Income Budget $100,000 Actual $120,000 Variance $20,000 F 60,000 72,000 12,000 U 10,000 9,000 1,000 F $ 30,000 $ 39,000 $ 9,000 F