Student name student id

Student name student id

Variance report and analysis

Variance to Budget
First Quarter ended September 2011
Actual Results Budget - Actual - $ %varianc F or U
Q1 Q1 Variance e
Sales 3,394,247 3,371,200 -23,047 -1 U
Cost Of Goods Sold 2,025,234 1,955,296 -69,938 -3 U
Gross Profit 1,369,013 1,415,904 46,891 3 F
Gross Profit % 40% 42% 2% F
Expenses F
Accounting Fees 2,500 2,500 0 0 F
Interest Expenses 21,127 28,150 7,023 33 F
Bank Charges 400 380 -20 -5 U
Depreciation 42,500 42,500 0 0 F
Insurance 3,348 3,348 1 0 F
Store Supplies 750 790 40 5 F
Advertising 200,000 150,000 -50,000 -25 U
Cleaning 3,256 3,325 69 2 F
Repairs & Maintenance 16,068 16,150 82 1 F
Rent 660,127 660,127 0 0 F
Telephone 2,999 3,100 101 3 F
Electricity Expense 5,356 5,245 -111 -2 U
Luxury Car Tax 3,000 12,000 9,000 300 F
Fringe Benefits Tax 7,000 7,000 0 0 F
Superannuation 37,404 37,404 0 0 F
Wages & Salaries 415,600 410,500 -5,100 -1 U
Payroll Tax 19,741 19,741 0 0 F
Workers' Compensation 8,312 8,312 0 0 F
Total Expenses 1,449,488 1,410,572 -38,916 -3 U
Net Profit (Before Tax) -80,475 5,333 85,808 -107 U
Income Tax -24,142 1,600 25,742 -107 U
Net Profit -56,332 3,733 60,065 -107 U
Student name student id

Debtors ageing report

2009/10 2010/11 2011/12
Trade Debtors 850,000.00 975,000.00 1,100,000.00
Sales 14,550,100.00 15,714,108.00 16,971,236.64
Debtor Days 21.32 22.65 23.66

Cash flow analysis

GST CASH FLOW BUDGET
CASH FLOW ANALYSIS 2011/12 Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4
- GST 10%
GST Collected 1697123.66 339424.73 407309.68 441252.15 509137.10
Less GST Paid 323744.42 91877.07 77124.30 77247.91 77495.15
GST Payable 1373379.24 247547.66 330185.38 364004.24 431641.95

Issues and reasons

 The sales for the first quarter are good but the discounts issued are too high.
 The firm loans are affected by the fluctuations of the interest in the economy.
Causes
 The firm did not get into the national magazines for advertisement leading the firm to
issue high discounts
 The company’s wages were higher.
Performance
Average debtors’ payment is increasing. For instance, the debtors for the firm remains at 30
days’ periods.
The gross profit has declined due to the recession and cost of advertising.
The wages and salary incurs are a lot of expenses that is at 12 percent with average industry rate
for an employment being eleven percent.
Response to the board
The company gross margin has managed to sustain the gross margin in it budgets. This indicates
ethics and integrity of the staff.
Student name student id

Recommendation
The board should revise the following areas of the budget:

a) The salary and wages

b) The interest rates for the bank

c) Applications of discounts on public and school holidays.

Evaluations

 The firm should restructure the bank loan in such a manner that will help the company to

avoid volatility issues.

 The firm prepares the budget at cost center such as the bank interest.