Compare the individual items in the actual profit and loss against that budgeted for in Figure 5.4.3. Why are some of the items up and some down. Is every figure bad?

 

Budget Actual Variance Sales units 2400 2170 Sales value 48 000 43 400 -230 -4600 Materials used 11 520 Distribution 3675 11 754 3255 234 -420 Labour 6 850 7 550 700 Prime cost 22 045 22 559 514 Plant depreciation 2 062 2 062 0 Total manf. cost 24 107 24 621 514 Gross profit 23 893 18 779 -5 114 Salaries 9 856 10 600 744 Rent 5 000 5 000 0 Misc. 1 2001 1.830 630 Car 1850 2090 240 Acct. 700 1100 400 Bank 2 200 2 200 0 Sub-total 20 806 22 820 2014 750 800 50 938 938 0 22 494 24 508. 2014 1399 -5729 -7 128 Figure 5.4.3 Profit and loss variance Office depreciation Car depreciation Total overheads Net profit