good budget


Name: Assignment
A good budget is built with thoughtful consideration of future costs and revenue. Though your budget is formulated with expected figures in mind, the actual resulting values may vary considerably. This variance–from projected to actual–can be a pleasant surprise or a fiscal nightmare and can make financial decision making difficult. Fortunately, variance analysis can enable management to determine why variance occurred and what can be done to mitigate its effects.
Using the following performance data, calculate the volume adjusted labor rate variance and volume adjusted efficiency variance. Your Variable Expense Factor is 40% and your Volume Change Factor is 50%.
Actual Budget
Salaries 345,000 413,000
Payroll Hours 11,000 9,500
Service Volume 75,000 150,000
Acutal Budget
Salaries 345,000 413,000
Payroll Hours 11,000 9,500
Service Volume 75,000 150,000
Actual Volume 75,000
Budget Volume 150,000
Variable Expense Factor 40%
Volume Change Factor -50%
Volume Adjustment Factor -20%
Description Actual Budget Variance Unfavorable
Salaries 345,000 413,000 68,000
Volume Adjustment
Volume Adjusted Salaries
Paid Hours
Volume Adjustment
Volume Adjusted Hours
Labor Rate
Labor Rate Variance
Efficiency Variance
Total Variance
For this Assignment, run a variance analysis. Based on the information you obtain,assess the results of the analysis, suggest potential causes of the budget variances and an explanation for addressing the situation.
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