What is contributing to the change in profit

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Reference no: EM131461838

You run a lab that performs a single blood test that calculates an overall 'wellness' assessment, providing a report that gives information on a number of key short and long term health indicators.

Before the start of the year you prepared a budget projecting sales, costs and profit on a monthly basis. This budget assumed monthly sales of 1700 units at a price of $33.50 each. You projected that variable costs would be $13 a unit in labor and $15 in materials and supplies per test.

At the end of January, you looked at your actual results for the month and prepared a flexible budget.

Here are the 3 budgets side by side.

Static Flexible Actual

Revenues $56,950 $47,737.50 $49,875

Variable Cost $47,600 $39,900 $41,500

Fixed Cost $6,000 $6,000 $6,250

Profit $3,350 $1,837.50 $2,125

What is contributing to the change in profit? In other words, explain where the profit differentials are coming from. Feel free to attach any calculations to support your answer.

Reference no: EM131461838

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