The picture below shows your budget for a lemonade stand, and my trying to exceed or meet
The picture below shows your budget for a lemonade stand, and my trying to exceed or meet the budget.
Using the RED box with WHITE numbers as the ACTUAL results, prepare the variance analysis between YOUR budget and the ACTUAL results I provided.
You must show three variances:
(1) the $ change resulting solely from me selling more or less units (i.e., sales revenue volume variance),
(2) the $ change resulting solely from me selling units at a higher or lower price (i.e., sales revenue price variance), and
(3) the $ change resulting solely from me producing more or less units (most similar to direct materials production volume variance).
Once the analysis is finished, please engage in a conversation covering aspects like your budget assessment, initial perceptions of its complexity, and an evaluation of my performance (ACTUAL BUDGET) regarding discrepancies. To illustrate, it's crucial for individuals with budgets aligning sales and production quantities to contemplate the plausibility of such an anticipation. This reflection becomes significant considering the fixed price determined by the stand's manager and the limitation of lemonade production in multiples of 7 cups.