Ny-eve Consulting Group”s accountant has produced the following budget, actual, and variance report, showing that profits were behind expectations by almost $18,000.
Ny-eve Consulting Group: Variance Report
Hours sold Average price/hour
Direct labour hours
Average salary cost
Direct labour cost
Variable overhead costs
“Travel: 5% of revenue
Fixed overhead costs
What does the report tell the reader? What is its limitation?
Construct a flexible budget and determine the variances. How does that provide more information to users?
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