Assume that Carmen's Cookies is preparing a budget for the month ending November 30. Management prepares the budget for the month ending November 30 by starting with the actual results for April that is shown below. Then, management considers what the differences in costs will be between April and November.

CARMEN'S COOKIES
Retail Responsibility Center
Actual Costs
For the Month Ending April 30
	Actual
	(April)
Food
Flour	$	3,000
Eggs		6,100
Chocolate		2,900
Nuts		3,000
Other		3,100
Total food	$	18,100
Labor
Manager	$	3,300
Other		2,400
Total labor	$	5,700
Utilities		2,700
Rent		5,900
Total cookie costs	$	32,400
Number of cookies sold		34,000

Management expects cookie sales to be 100 percent greater in November than in April because of the holiday season. Management expects that all food costs (e.g., flour, eggs) will be 125 percent higher in November than in April because of the increase in cookie sales and because prices for ingredients are generally higher in the high demand holiday months. Management expects other labor costs to be 125 percent higher in November than in April, partly because more labor will be required in November and partly because employees will get a pay raise. (125 percent higher means that the amount in November will be 225 percent of the amount in April.) The manager will get a pay raise that will increase the salary from $3,300 in April to $3,800 in November. Utilities will be 5 percent higher in November than in April. Rent will be the same in November as in April.

Now, move ahead to December and assume the following actual results occurred in November:

Required:

a. Prepare a statement that compares the budgeted and actual costs. (Negative amounts should be indicated by a minus sign.)

b. Suppose that you have limited time to determine why actual costs are not the same as budgeted costs. Which three cost items would you investigate to see why actual and budgeted costs are different?

	Eggs, chocolate and other labor
	Flour, chocolate and other labor
	Nuts, chocolate and eggs