1. Imagine that you run a nationwide chain of pizza stores in multiple states. Now it is the end of 2021, and you start preparing various budgets for 2022. List what information you need to gather and what assumptions you must make in order to prepare various budgets. Is there a specific order of the budgets prepared? Which budgets are most important in your opinion? Explain why.
2. Your pizza stores had projected to earn $1 million in profits in the last quarter. Instead, it lost $300,000. Describe several factors that could explain the difference between the budgeted and actual performance. In addition, briefly explain how variance analysis will assist you in analyzing the performance.