Now, move ahead to January of the following year and assume the following actual results occurred in December: Required: a. Prepare a statement that compares the budgeted and actual costs. (Negative amounts should be indicated by a minus sign.) THE AM BAKERY Bakery sales Actual and Budgeted Costs For the Month Ending December 31 Actual Ingredients Flour Butter Oil Fruit Nuts Chocolate Other Total ingredients $ 8,475 7,690 3,814 3,017 2,112 1,610 860 $ 27,578 Labor Channel manager $ 5,100 Other 24,411 Utilities 3,220 Rent 3,620 Marketing 211 Total bakery costs $ 64,140 Revenues 103,275 Budgeted Difference Assume that The AM Bakery is preparing a budget for the month ending December 31. Management prepares the budget for the month ending December 31 by starting with the actual results for August that is shown below. Then, management considers what the differences in costs will be between August and December. THE AM BAKERY Bakery sales Actual and Budgeted Costs For the Month Ending August 31 Ingredients Flour Butter Oil Fruit Nuts Chocolate Other Total ingredients Labor Channel manager Other Actual $ 3,905 3,505 1,705 1,305 905 805 405 $ 12,535 $ 4,550 Utilities Rent 10,705 2,420 3,620 Marketing 200 Total bakery costs Revenues $ 34,030 52,250 Management expects revenue to be 100 percent greater in December than in August because of the holiday season. Management expects that all food costs (e.g., flour, butter, and so on) will be 120 percent higher in December than in August because of the increase in sales and because prices for ingredients are generally higher in the high demand holiday months. Management expects "other" labor costs to be 130 percent higher in December than in August, partly because more labor will be required in December and partly because employees will get a pay raise. The manager will get a pay raise that will increase his salary from $4,550 in April to $5,100 in December. Utilities will be 15 percent higher in December than in August. Rent and marketing will be the same in December as in August