Question 4 Ciao Magazine Ltd is a small family-owned company that publishes a range of magazines aimed at women, men and children. The company's accountant has provided the following figures from the accounting records for the month of July 2018. Budget Actual 20,000 10,000 8,000 21,320 9,545 9,080 Revenue Women's magazines Men's magazines Children's magazines Expenditure Cost of sales Administrative expenses Distribution costs Finance costs 14,000 11,000 500 25 13,495 11,548 452 25 Required a) Using the above information, prepare a budget report for Ciao Magazines Ltd that shows the budgeted and actual profit or loss for the month of July 2018. You should show all the variances, indicating whether they are favourable or adverse. (7 marks) b) Interpret your budget report by commenting briefly on the overall revenue and expenditure variances and the extent to which the financial objectives for the month have been achieved. (3 marks) c) Define the term 'budget' and explain the purpose of a budgetary control system with reference to Ciao Magazines. (5 marks) d) Your growing reputation as a management accountant has spread and you have been asked to write an article for the local newspaper entitled 'What makes an effective system of budgetary control?'. Write the article in which you should critically discuss the main requirements for an effective system of budgetary control and any potential disadvantages with reference to Ciao Magazines. (10 marks) (Total 25 marks)