Chapter 11 question 6

6. Dee Flowers is the sole owner of the most successful catering business in town. December is her busiest month, and she has just completed it. Dee now has a chance to take a moment and evaluate the operations budget she has prepared for the month of December, as well as the actual results achieved by her company. Dee uses a slightly modified version of the Uniform System of Accounts for Restaurants (USAR) to prepare her budgets because she wants to identify her total gross profit (revenue less cost of sales). Below are her original operations budget and her actual operating results for the month. Complete the sheet for her by providing variance dollars and variance percent- ages for each budgeted item and then answer the questions that follow. Dee's Catering Budget Versus Actual Comparison for December Budget ($) % Actual ($) % Variance ($) SALES Food 73.9 193,251 185,200 65,250 250,450 68.4 31.6 Beverage Total Sales 26.1 89,250 282,501 100.0 100.0 36.4 35.7 COST OF SALES Food Beverage Total Cost of Sales 67,500 14,500 82,000 22.2 68,925 20.415 89,340 22.9 32.7 31.6 GROSS PROFIT Food Beverage Total Gross Profit 117,700 50,750 168,450 124,326 68,895 64.3 77.1 77.8 67.8 193,161 68.4 15.5 38,750 9,500 26,500 44,850 11,203 15.9 4.0 3.8 10.6 9.6 27,210 0 0 0.0 0.5 0.0 0.1 1,200 150 3,250 1.3 1.2 1.4 1.0 OPERATING EXPENSES Management and Staff Employee Benefits Direct Operating Expenses Music and Entertainment Marketing Utility Services Repairs and Maintenance Administrative and General Occupancy Depreciation Total Operating Expenses OPERATING INCOME Interest INCOME BEFORE INCOME TAXES Income Taxes NET INCOME 3,500 24,750 1,200 9.9 9.1 3,289 2,874 25,598 1,200 2,200 118,574 0.5 0.4 0.8 2,200 0.9 44.3 42.0 110,850 57,600 23.0 26.4 2.5 2.8 7,100 50,500 12,625 37,875 20.2 5.0 15.1 74,587 7.100 67,487 16,872 50,615 23.9 6,0 17.9 a. What is the variance (dollar and percent) in Dee's total cost of sales for the month of December? b. To what do you attribute the variance in Dee's total cost of sales for the month of December? c. What is the variance (dollar and percent) in Dee's management and staff costs for the month of December? d. To what do you attribute the variance in Dec's management and staff costs for the month of December? e. What is the variance (dollar and percent) in Dee's marketing expenses for the month of December? f. What advice would you give Dee regarding her marketing expense variance? g. What is the variance (dollar and percent) in Dee's net income for the month of December? h. To what do you attribute the variance in Dec's net income for the month of December? 6. Dee Flowers is the sole owner of the most successful catering business in town. December is her busiest month, and she has just completed it. Dee now has a chance to take a moment and evaluate the operations budget she has prepared for the month of December, as well as the actual results achieved by her company. Dee uses a slightly modified version of the Uniform System of Accounts for Restaurants (USAR) to prepare her budgets because she wants to identify her total gross profit (revenue less cost of sales). Below are her original operations budget and her actual operating results for the month. Complete the sheet for her by providing variance dollars and variance percent- ages for each budgeted item and then answer the questions that follow. Dee's Catering Budget Versus Actual Comparison for December Budget ($) % Actual ($) % Variance ($) SALES Food 73.9 193,251 185,200 65,250 250,450 68.4 31.6 Beverage Total Sales 26.1 89,250 282,501 100.0 100.0 36.4 35.7 COST OF SALES Food Beverage Total Cost of Sales 67,500 14,500 82,000 22.2 68,925 20.415 89,340 22.9 32.7 31.6 GROSS PROFIT Food Beverage Total Gross Profit 117,700 50,750 168,450 124,326 68,895 64.3 77.1 77.8 67.8 193,161 68.4 15.5 38,750 9,500 26,500 44,850 11,203 15.9 4.0 3.8 10.6 9.6 27,210 0 0 0.0 0.5 0.0 0.1 1,200 150 3,250 1.3 1.2 1.4 1.0 OPERATING EXPENSES Management and Staff Employee Benefits Direct Operating Expenses Music and Entertainment Marketing Utility Services Repairs and Maintenance Administrative and General Occupancy Depreciation Total Operating Expenses OPERATING INCOME Interest INCOME BEFORE INCOME TAXES Income Taxes NET INCOME 3,500 24,750 1,200 9.9 9.1 3,289 2,874 25,598 1,200 2,200 118,574 0.5 0.4 0.8 2,200 0.9 44.3 42.0 110,850 57,600 23.0 26.4 2.5 2.8 7,100 50,500 12,625 37,875 20.2 5.0 15.1 74,587 7.100 67,487 16,872 50,615 23.9 6,0 17.9 a. What is the variance (dollar and percent) in Dee's total cost of sales for the month of December? b. To what do you attribute the variance in Dee's total cost of sales for the month of December? c. What is the variance (dollar and percent) in Dee's management and staff costs for the month of December? d. To what do you attribute the variance in Dec's management and staff costs for the month of December? e. What is the variance (dollar and percent) in Dee's marketing expenses for the month of December? f. What advice would you give Dee regarding her marketing expense variance? g. What is the variance (dollar and percent) in Dee's net income for the month of December? h. To what do you attribute the variance in Dec's net income for the month of December