A shop is open 24 hours, with three shifts (same # of people per shift). Shift #1: 6:00 a.m., Shift #2: 2:00 p.m., shift #3: 10:00 p.m. At the end of each month, the owner meets with the manager to discuss how things went that month to prepare the budget for the upcoming month. The basic budget that is used each month is as follows: Number of shifts Number of customers Cups of X sold Y items sold 90 18,000 22,500 6,300 X revenue Y revenue 132,750 22,050 X cost 28,800 12,600 Y cost Labour cost Utilities cost 68,400 24,300 3,000 Depreciation on equipment Rent 1,800 At the end of march, meeting because -the results for march weren't good-net income was only $13,084. Much of the discussion centered around the three shifts that seemed to be contributing the least to the overall success of the firm. These are the last shift (from 10:00 p.m. to 6:00 a.m.) beginning on Sunday night through early Wednesday morning. The manager suggested that they close the shop for these three shifts. Both agreed that average customers per shift would likely increase as a result, perhaps to as much as 240 customers per shift. It was agreed to close those shifts for the month of April and re- evaluate afterwards/ They prepared the budget based on the reduced number of shifts and the expected increase in customers per shift: -3316 yes -17522 yes At the end of April, the owner prepared the following static budget analysis: Item budget actual variance concerning # of shifts 156 156 0 customers 18720 17738 982 yes cups of X item 23400 24412 -1012 food items 6552 9868 X revenue 138060 133146 4914 Z revenue 22932 40454 X cost 29952 28918 1034 13760 23188 -9428 yes labour cost 59280 59280 0 utility cost 21060 20280 780 depreciation on equipment 3000 3000 0 rent 1800 2000 assume that the costs included in the budget are the only costs the firm incurs. Cups of X and number of Y items sold are budgeted per customer. Utilities cost is budgeted per shift. Depreciation and rent are fixed. Concerning (yes) is based on whether anything over 5% of the budget (is concerning or not). Z cost -200 yes With detailed calculations** 1. 2. 3. 4. 5. Prepare a flexible budget analysis for the company for the month of Aprill Do not forget to include activity levels. Compute expected profit according to the original budget (before the experiment). Compute expected profit according to the April 1 budget. Compute expected profit according to the flexible budget. Compute actual profit. A shop is open 24 hours, with three shifts (same # of people per shift). Shift #1: 6:00 a.m., Shift #2: 2:00 p.m., shift #3: 10:00 p.m. At the end of each month, the owner meets with the manager to discuss how things went that month to prepare the budget for the upcoming month. The basic budget that is used each month is as follows: Number of shifts Number of customers Cups of X sold Y items sold 90 18,000 22,500 6,300 X revenue Y revenue 132,750 22,050 X cost 28,800 12,600 Y cost Labour cost Utilities cost 68,400 24,300 3,000 Depreciation on equipment Rent 1,800 At the end of march, meeting because -the results for march weren't good-net income was only $13,084. Much of the discussion centered around the three shifts that seemed to be contributing the least to the overall success of the firm. These are the last shift (from 10:00 p.m. to 6:00 a.m.) beginning on Sunday night through early Wednesday morning. The manager suggested that they close the shop for these three shifts. Both agreed that average customers per shift would likely increase as a result, perhaps to as much as 240 customers per shift. It was agreed to close those shifts for the month of April and re- evaluate afterwards/ They prepared the budget based on the reduced number of shifts and the expected increase in customers per shift: -3316 yes -17522 yes At the end of April, the owner prepared the following static budget analysis: Item budget actual variance concerning # of shifts 156 156 0 customers 18720 17738 982 yes cups of X item 23400 24412 -1012 food items 6552 9868 X revenue 138060 133146 4914 Z revenue 22932 40454 X cost 29952 28918 1034 13760 23188 -9428 yes labour cost 59280 59280 0 utility cost 21060 20280 780 depreciation on equipment 3000 3000 0 rent 1800 2000 assume that the costs included in the budget are the only costs the firm incurs. Cups of X and number of Y items sold are budgeted per customer. Utilities cost is budgeted per shift. Depreciation and rent are fixed. Concerning (yes) is based on whether anything over 5% of the budget (is concerning or not). Z cost -200 yes With detailed calculations** 1. 2. 3. 4. 5. Prepare a flexible budget analysis for the company for the month of Aprill Do not forget to include activity levels. Compute expected profit according to the original budget (before the experiment). Compute expected profit according to the April 1 budget. Compute expected profit according to the flexible budget. Compute actual profit