Part B - Project

Scenario 1 (20 marks):

APC Car Washing's accountant has just finished the monthly figures for February 2017 and has prepared the following schedules showing current month and year-to-date budgets and actual: APC Car Washing Performance Analysis and Variance Report

APC Car Washing Performance Analysis and Variance Report

February 2017 July 2016 to February

2017

Budget Actual Budget Actual

Cars expected to be

washed

180 195 1,440 1,520

Expected Revenue per job $30 $35 $30 $33

Total Revenue $5,400 $6,825 $43,200 $50,160

Less: Variable Costs

Labour Costs $1,080 $1,365 $8,640 $10,470

Consumables $180 $210 $1,440 $1,980

Motor Vehicle Expenses $270 $310 $2,160 $2,790

Total Variable Costs $1,530 $1,885 $12,240 $15,240

Fixed Costs

Advertising $200 $200 $1,600 $1,600

Depreciation $250 $250 $2,000 $2,000

Insurance $100 $100 $800 $800

Mobile Telephone Costs $150 $176 $1,200 $1,680

Office Costs $450 $520 $3,600 $4,350

Total Fixed Costs $1,150 $1,246 $9,200 $10,430

Total Costs (Variable +

Fixed)

$2,680 $3,131 $21,440 $25,670

Net Income $2,720 $3,694 $21,760 $24,490

Required: Prepare a report comparing Actual to Budget for both the:

a. Current month of February, and

b. Year-to-date figures to disclose relevant variances for revenue and cost items and to signify whether the variance is favourable (F) or unfavourable (U).