Burnham Biscuits have been producing baked products for the catering industry since 1945 from a single factory site in Hove. All aspects of financial management and planning are under the control of Mike Burnham, the current Managing Director, who inherited a majority of the shareholding from his father some seven years ago. The company has struggled with a declining market, recently losing contracts with Burtons and Master foods to competition from within the UK. Sector analysis suggests that whilst customers are generally happy with the quality of Burnham products, there have been problems with distribution and supply during period of high demand and also with price. Burnham's continue to use Incremental Based Budgeting as their chief financial forecasting model. Budgets are prepared for the whole company, rather than individual departments and processes, and there is little costing data to show where overheads are accruing or where cash flow problems are affecting the smooth operation of the business. Sales Turnover Direct Costs: Materials Labour Power Packing and Distribution Indirect Costs Administration Advertising and Marketing Premises Costs Question (40 Marks) Budget 900,000 200,000 150,000 80,000 40,000 100,000 20,000 185,000 Actual (outrun) 630,000 245,000 220,000 85,000 50,000 130,000 20,000 290,000 Construct a 'five step' Budget Variance Analysis, highlighting: A calculation of three of the most significant variances between projected and outrun figures. (5 marks) Burnham Biscuits have been producing baked products for the catering industry since 1945 from a single factory site in Hove. All aspects of financial management and planning are under the control of Mike Burnham, the current Managing Director, who inherited a majority of the shareholding from his father some seven years ago. The company has struggled with a declining market, recently losing contracts with Burtons and Master foods to competition from within the UK. Sector analysis suggests that whilst customers are generally happy with the quality of Burnham products, there have been problems with distribution and supply during period of high demand and also with price. Burnham's continue to use Incremental Based Budgeting as their chief financial forecasting model. Budgets are prepared for the whole company, rather than individual departments and processes, and there is little costing data to show where overheads are accruing or where cash flow problems are affecting the smooth operation of the business. Sales Turnover Direct Costs: Materials Labour Power Packing and Distribution Indirect Costs Administration Advertising and Marketing Premises Costs Question (40 Marks) Budget 900,000 200,000 150,000 80,000 40,000 100,000 20,000 185,000 Actual (outrun) 630,000 245,000 220,000 85,000 50,000 130,000 20,000 290,000 Construct a 'five step' Budget Variance Analysis, highlighting: A calculation of three of the most significant variances between projected and outrun figures. (5 marks) Burnham Biscuits have been producing baked products for the catering industry since 1945 from a single factory site in Hove. All aspects of financial management and planning are under the control of Mike Burnham, the current Managing Director, who inherited a majority of the shareholding from his father some seven years ago. The company has struggled with a declining market, recently losing contracts with Burtons and Master foods to competition from within the UK. Sector analysis suggests that whilst customers are generally happy with the quality of Burnham products, there have been problems with distribution and supply during period of high demand and also with price. Burnham's continue to use Incremental Based Budgeting as their chief financial forecasting model. Budgets are prepared for the whole company, rather than individual departments and processes, and there is little costing data to show where overheads are accruing or where cash flow problems are affecting the smooth operation of the business. Sales Turnover Direct Costs: Materials Labour Power Packing and Distribution Indirect Costs Administration Advertising and Marketing Premises Costs Question (40 Marks) Budget 900,000 200,000 150,000 80,000 40,000 100,000 20,000 185,000 Actual (outrun) 630,000 245,000 220,000 85,000 50,000 130,000 20,000 290,000 Construct a 'five step' Budget Variance Analysis, highlighting: A calculation of three of the most significant variances between projected and outrun figures. (5 marks)