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Should be concerned with the level of actual expenses

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Reference no: EM132507688

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

Question 1: 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? Need performance report that will help her focus on areas needing attention.

Reference no: EM132507688

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