PARTA The following is the income statement for Harry Potter's business operations last year. tttt Harry Potter Pty Limitede Income Statemente For the Year ended 30 June 2007- Salese Less: Cost of Goods solde 446,420 316,512 Gross-profit 129,908- 650 3,239 244 Operating expenses Accounting fees Advertising Bank charges Depreciatione Electricity Insurancese Interest paide Legal feese Rente Stationerye Sundriese + Superannuation- Telephone- Wagese Total-operating expenses tttttttttttt -------.... 632 + ...........778 1,420 + ...... 1,600 .......... 2004 40,900 416 + 374 1,384 -894 34,612 -87,343 Net profite 42,56542 The following information is supplied for preparation of the budgets for coming year * Annual sales are expected to increase by 10% each year. + Expected average gross profit margin is 30% - Advertising costs are expected to increase by $800 each year Depreciation charges are the same each year Interest paid is the same each year. - Annual rent is expected to increase by 6% each year. Superannuation is 9% of wages Wages paid are expected to increase by 5% each year. All other operating expenses are expected to increase by 4% each year. Requirement: Using the above-information, prepare the budget for year 2008. (FNSCORG609A/03 not use Microsoft worde Part-B The details of actual figures for year 2008 are as follows: tttt Harry Potter Pty + Income Statement- For the Year ended-30 June 2008 Sales- Less: Cost of Goods solde 458,580 e 334.764 Gross profito tttt 123,816 Operating expenses Accounting fees Advertising Bank charges Depreciatione Electricity Insurancese Interest paide Legal fees Rente Stationery Sundriese Superannuation 5602 ****-4,168 2404 ----632 7624 1,650 - --- 1,6004 2104 -42,9454 428. 3634 3,488 ante e Legal fees Rente Stationery Sundries- Superannuation Telephone 210 42.945 4284 363 + 3,488 936 + 21.09.2018.... Assessment 3 FNSORG602A 38,750 Wages- Total-operating expenses ---96,732 4+ Net profit -.-27.084+ Requirement: Using the reported results above and the budget you have prepared for year 2008 a. Calculate the variance analysis-by-comparing actual figures with corresponding- budgets. b. Suggest one possible reason and a corrective action for each unfavourable variance-identified