Question
Part B - Project Scenario 1 (20 marks): APC Car Washing's accountant has just finished the monthly figures for February 2017 and has prepared the
Part B - Project
Scenario 1 (20 marks):
APC Car Washing's accountant has just finished the monthly figures for February 2017 and has prepared the following schedules showing current month and year-to-date budgets and actual: APC Car Washing Performance Analysis and Variance Report
APC Car Washing Performance Analysis and Variance Report
February 2017 July 2016 to February
2017
Budget Actual Budget Actual
Cars expected to be
washed
180 195 1,440 1,520
Expected Revenue per job $30 $35 $30 $33
Total Revenue $5,400 $6,825 $43,200 $50,160
Less: Variable Costs
Labour Costs $1,080 $1,365 $8,640 $10,470
Consumables $180 $210 $1,440 $1,980
Motor Vehicle Expenses $270 $310 $2,160 $2,790
Total Variable Costs $1,530 $1,885 $12,240 $15,240
Fixed Costs
Advertising $200 $200 $1,600 $1,600
Depreciation $250 $250 $2,000 $2,000
Insurance $100 $100 $800 $800
Mobile Telephone Costs $150 $176 $1,200 $1,680
Office Costs $450 $520 $3,600 $4,350
Total Fixed Costs $1,150 $1,246 $9,200 $10,430
Total Costs (Variable +
Fixed)
$2,680 $3,131 $21,440 $25,670
Net Income $2,720 $3,694 $21,760 $24,490
Required: Prepare a report comparing Actual to Budget for both the:
a. Current month of February, and
b. Year-to-date figures to disclose relevant variances for revenue and cost items and to signify whether the variance is favourable (F) or unfavourable (U).
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