The statement for the Cowly restaurant for the most recent completed month is as follows: Budget...

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The statement for the Cowly restaurant for the most recent completed month is as follows: Budget Number of customers Revenue Costs: Food and drink Staff wages Heat, light and power Rent, rates and other overheads Profit Actual 1,800 $ 87,300 26,100 38,250 8,100 12,600 2,250 1,500 $ 75,000 22,500 31,500 7,500 12,000 1,500 Variance S 12,300 F 3,600 A 6,750 A 600 A 600 A 750 F Notes: (1) Rent, rates and other overheads are apportioned to its restaurants by Yumi Co's head office, based on a fixed annual charge. (2) All other budgeted costs are treated as variable costs, based on the expected number of customers. Yumi Co currently adopts an incremental approach to budgeting, with the annual budget figures for each year being based on the previous year's figures. However, a new finance director has recently joined the company, and he has questioned whether this is suitable for all Yumi Co's restaurants. The statement for the Cowly restaurant for the most recent completed month is as follows: Budget Number of customers Revenue Costs: Food and drink Staff wages Heat, light and power Rent, rates and other overheads Profit Actual 1,800 $ 87,300 26,100 38,250 8,100 12,600 2,250 1,500 $ 75,000 22,500 31,500 7,500 12,000 1,500 Variance S 12,300 F 3,600 A 6,750 A 600 A 600 A 750 F Notes: (1) Rent, rates and other overheads are apportioned to its restaurants by Yumi Co's head office, based on a fixed annual charge. (2) All other budgeted costs are treated as variable costs, based on the expected number of customers. Yumi Co currently adopts an incremental approach to budgeting, with the annual budget figures for each year being based on the previous year's figures. However, a new finance director has recently joined the company, and he has questioned whether this is suitable for all Yumi Co's restaurants.

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In light of the new finance directors concerns Yumi Co has decided to review its current budgeting a... View the full answer