At Designs by Deirdre, the budgeted income statement for December, 2011, indicated sales of $600,000 and cost of sales of $400,000. Actual sales and cost of sales were $700,000 and $425,000, respectively. Should Deirdre Nelson, owner of the company, be concerned that cost of sales is $25,000 greater than planned? Explain the basis for your answer.
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