$.$ Assignment Question: make a variance analysis report based on the information in Exhibit $1.$

Would this be sufficient to explain the profit shortfall to Norton at the $8$ AM meeting?

Actual value Budgeted Value Variance Amount Acceptable & unacceptable

Revenues $3264000323190032100$ Acceptable

Expenses $29676102625550342060$ unacceptable

Profits $296390606350-309960$ unacceptable

Actual Revenue $($AR$)=$ $$3264000$

Budgeted Revenue $($ER$)=$ $$3231900$

Total Revenue Variance $=$ AR $-$ ER

$$3264000-$ $$3231900=$ $$32100$

Actual revenue is more than budgeted, so this is a favorable scenario.

Actual Expenses $($AE$)=$ $ $2967610$

Budgeted Expenses $($EE$)=$ $ $2625550$

Total Expense variance $=$ AE $-$ EE

$$2967610-$ $$2625550=$ $$342060$

Actual expense is more than the expected expenses, it is an unfavorable scenario.

Actual Profits $=$ $ $296390$

Budgeted Profits $=$ $ $606350$

Total Profit variance $=$ AP $-$ EP

$$296390-$ $$606350=($$$309960)$

Actual profit is way less than budgeted profit, making this an unfavorable scenario.

ANALYSIS

With the information in display $1,$ we need the fundamental part of expenses and encourage points of interest, which is almost how the two divisions have gone through and earned their cash. So$,$ more than the given data is needed to discover the zone of issue. From the information in Exhibit $1,$ we can tell there's an increment in cost$,$ but we cannot clarify why the cost has increased. This gives us a course where we must walk to discover the genuine root cause.

$2.$ Assignment Question make a variance analysis report based on the information in Exhibit $2.$ Quantity$/$Efficiency Variance $=($Actual Quantity $-$ Expected Quantity$)*$ Expected Price Price$/$Rate Variance $=($Actual Price $-$Expected Price$)*$ Actual Quantity

Quantity$/$Efficiency Variance $=($Actual Quantity $-$ Expected Quantity$)*$ Expected Price Price$/$Rate Variance $=($Actual Price $-$Expected Price$)*$ Actual Quantity

Revenue variance analysis:

Actual quantity

Budgeted

Quantity

Expected price Variance amount Acceptable & unacceptable

Revenue quantity $($# of hours$)390003591090278100$ A

Actual price Expected price Actual quantity Variance amount A&U

Revenue Rate $($hourly Rate$083\mathrm{.}699039000-246090$ U

Total Revenue $32010$ A

The actual amount is more than the budgeted amount, so indeed, even though the introductory hourly rate is somewhat lesser than the budgeted hourly rate, the genuine add$-$up to income has expanded and the fluctuation in income is favorable.

Consultant expense analysis:

Actual quantity Budgeted quantity Expected price Variance amount A&U

Consultant expense quantity $1131051665133200$ U

Consultant expense rate $17956\mathrm{.}1946916650113147600$ U

Total consultant expense variance $280800$ U

Per unit cost of specialist expense Number of consultants

Actual per unit cost of expert $2029050/113=17,956$

Budgeted per unit price of consultant $=1748250/105=$ $$16,650$

Within the cost situation, the most parameter number of experts and the actual expense

rate of experts both have expanded. So$,$ the company is paying or investing more in

consultants. The change in specialist cost is acceptable.

Total expense analysis: Total expense variance $=$ Consultant expense variance $+$ Operating expense variance

Actual operating expense Expected operating expense Variance A&U

Operating expense $93856087730061260$ U

Total expense variance $342060$ U

The information in this address could be further than the one provided for the primary address. Here, one of the contributing components to the increment in cost is the increase in the number of experts and the expert cost rate. On the other hand, the unacceptable fluctuation within the working cost is more noteworthy than the budgeted or anticipated working cost.

$3.$ Assignment Question make a spending and volume variance analysis of operating expenses based on the additional information supplied in Exhibit $3.$

Number of budgeted consultants $=105$

Budgeted variable expense$/$ Number of budgeted consultants $=525000/105=5000$

Budgeted Variable expense per consultant $=5000$

Spending variance $=$ Actual Expense $-$ Flexible Expense

Actual Flexible budget variance Flexible Sales volume variance Budget Static budget variance

Revenues $3264000-2460003510000278100323190032100$

Less

Consultant salaries and fringes $202905014760018814501332001748250280800$

Operating expenses $938560212609173004000087730061260$

Total expenses $296761016886027987501732002625550342060$

Operating profit $296390-414860711250104900606350-309960$

Profit$\%9\%20\%19\%$

Operating statistics Actual Flexible Budget

Number of consultant $($FTE$)113113105$

Hours supplied $508505085047250$

Hours billed $390003900035910$

Average billing rate $83\mathrm{.}692307699090$

Flexible Budget Variance $=$ Actual Operating Profit $-$ Flexible Operating Profit $=-414860($U$)$

Sales Volume Variance $=$ Flexible Operating Profit $-$ Budget Operating Profit $=104900($A$)$

Static Budget Variance