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SUBMITTED TO:
SIR NAVEED MUGHAL
GROUP MEMBERS:
SHAMAILA SAFDAR
15121013
SIDRA MALIK
15121016
MBA Finance
Fall 15
SUBMISSION DATE: 10-AUG-2016
Question#1:
Perform a revenue and expenditure variance o the 2009 Kalamazoo budget based on the
information /provided. State whether the revenue and expenditure variance favorable or
unfavorable
Variance Type
Actual
Budget
Variance
Favorable/unfavorable
Favorable
unfavorable
Revenue
850,000
820,000
Amount
30,000
Variance
Expenditure
1070,000
820,000
250,000
Variance
Question#2:
Compute revenue quantity variance and price variance for annual ticket revenue and stete
whether each is favorable or unfavorable?
Ticket Revenue Variance:
Revenue
Actual
Budget
Budgeted
Variance
Favorable/unfavorable
Variance
Quantity
Quantity
Price
Quantity
10,000
15,000
8.00
40,000
unfavorable
Revenue
Actual
Budget
Actual
Variance
Favorable/unfavorable
Variance
Price
Price
Quantity
Price
10
10,000
20,000
Favorable
Question#3:
Compute expenditure quantity variance and price variance for animal food expenditure
and state whether each is favorable or unfavorable?
Expenditure Actual
Budget
Budgeted
Variance
Favorable/unfavorable
Variance
Quantity
Quantity
Price
Quantity
120
100
2400
20
Favorable
Expenditure
Actual
Budget
Actual
Variance
Favorable/unfavorable
Variance
Price
Price
Quantity
Price
30,00
2400
120
720,00
unfavorable
Question#4:
What is the overall situation at the zoo that we see from performing this variance? Review
these issue and the budget, what else should Roy Lyons investigate? What information is
needed to be able to perform these analyses?
By performing the variances, I can see that the Zoo has had an unfavorable year. Ticket
sales were down, however the price per ticket was higher than actually budgeted. What could
have been a $40,000 loss is actually a $20,000 loss due to the price increase. There is an
unfavorable cost increase to animal feed of $600 per animal and this is most likely do to the good
breeding year, an increase of animal population by 20 head, and weird weather for the year.
I see this as a favorable cause for the deficit. Yes the cost to feed the additional heads is
over budget, however each animal is worth x amount of dollars and should increase their bottom
line for assets. They can sell these animals. I also think we need to investigate the ticket price
increase as compared to the decline in number of tickets sold. Did the number of tickets sold
decline due just to the numerous days the zoo needed to close, or was the decline still higher than
that and maybe due to the increase in ticket prices. We need to know the average number of
tickets sold per day, and the amount of days the zoo had to close that it would have normally
been open.