Budgets Mark: /24
1. Whitby Kippers Ltd produced an income, expenditure and profit budget for the 6 months
from April to September. At the end of September, it reviewed its actual performance
against budget. Expenses were 10% above budget. Complete the table below. [6]
Budget £ Actual £ Variance £ (F/A)
Income 115 200 119 070 Adverse
Expenditure 64 900 130,977 Adverse
Profit 50,300 - 11,907 Adverse
2. The MD asked finance for a more detailed breakdown of the budgeted and actual
expenditure. This is shown below. Complete the variance column. [5]
Budget £ Actual £ Variance £ (F/A)
Raw materials 28 800 30 690 Adverse
Labour costs 32 000 34 650 Adverse
Utilities 800 880 Adverse
Other expenses 3 300 3 630 Adverse
Total 64 900 69 850 Adverse
3. This information is used to inform the October to December cash flow forecast. Fill in the
blanks in the table below. [13]
October November December
Cash in £ £ £
Online sales 12 000 12 000 12 000
Deli sales 6 000 6 000 6 000
Total cash inflow 18,000 18 000 18,000
Cash out
Raw materials 4 500 4 500 4 500
Labour 5 000 5 000 5 000
Utilities 400 0 0
Other costs 550 550 550
Total cash outflow 10,450 10,050 10,050
Net cash flow 7,550 7,950 7,950
Opening balance 15 550 23,100 31,050
Closing balance 23,100 31,050 39,000
What are the advantages to Whitby Kippers Ltd of carrying out variance analysis?
Efficient budgeting activity
More detailed and forward-looking budget decisions
Makes meeting objectives and aims easier to achieve with budget controls
1. Whitby Kippers Ltd produced an income, expenditure and profit budget for the 6 months
from April to September. At the end of September, it reviewed its actual performance
against budget. Expenses were 10% above budget. Complete the table below. [6]
Budget £ Actual £ Variance £ (F/A)
Income 115 200 119 070 Adverse
Expenditure 64 900 130,977 Adverse
Profit 50,300 - 11,907 Adverse
2. The MD asked finance for a more detailed breakdown of the budgeted and actual
expenditure. This is shown below. Complete the variance column. [5]
Budget £ Actual £ Variance £ (F/A)
Raw materials 28 800 30 690 Adverse
Labour costs 32 000 34 650 Adverse
Utilities 800 880 Adverse
Other expenses 3 300 3 630 Adverse
Total 64 900 69 850 Adverse
3. This information is used to inform the October to December cash flow forecast. Fill in the
blanks in the table below. [13]
October November December
Cash in £ £ £
Online sales 12 000 12 000 12 000
Deli sales 6 000 6 000 6 000
Total cash inflow 18,000 18 000 18,000
Cash out
Raw materials 4 500 4 500 4 500
Labour 5 000 5 000 5 000
Utilities 400 0 0
Other costs 550 550 550
Total cash outflow 10,450 10,050 10,050
Net cash flow 7,550 7,950 7,950
Opening balance 15 550 23,100 31,050
Closing balance 23,100 31,050 39,000
What are the advantages to Whitby Kippers Ltd of carrying out variance analysis?
Efficient budgeting activity
More detailed and forward-looking budget decisions
Makes meeting objectives and aims easier to achieve with budget controls
