Reference no: EM131754209

At the start of 2015, the New Orleans Fine Food Company budgeted before-tax income as follows:

Sales                                                                $550,000

Less:

                  Material cost               $100,000

                  Labor cost                                     $220,000

                  Owner's salary           $65,000

Rent                             $55,000

Depreciation               $45,000

Utilities                        $22,000     $507,000

Income before taxes                                      $443,000

Actual before tax income for 2015 was:

Sales                                                                $660,000

Less:

                  Material cost               $130,000

                  Labor cost                                     $285,000

                  Owner's salary           $65,750

Rent                             $55,000

Depreciation               $45,200

Utilities                        $21,000     $601,950

Income before taxes                                      $58,050

Florence Roden, the owner of the company, is pleased that sales were much higher than planned, but she also is concerned that expenses were $94,950 higher than the amounts she budgeted. Should she be concerned with the level of actual expenses? Prepare a performance report that will help her focus on areas needing attention.