1. Lambda Consulting

Scenario: Budget Variance Analysis

Data: Lambda Consulting prepared a budget for the year 2023 with the following projections:

• Sales Revenue: $1,000,000
• Variable Costs: $400,000
• Fixed Costs: $200,000
• Budgeted Net Income: $400,000

At the end of 2023, Lambda Consulting reported actual financial results:

• Actual Sales Revenue: $900,000
• Actual Variable Costs: $380,000
• Actual Fixed Costs: $210,000

Requirements: Calculate the sales variance, cost variance, and profit variance for Lambda Consulting. Analyze the factors contributing to each variance and their impact on financial performance. Discuss the importance of budget variance analysis in evaluating operational performance. Recommend actions for Lambda Consulting to address unfavorable variances and improve financial results.