# Module 4 – case budgeting, variance analysis, and performance

## Module 4 – Case

### BUDGETING, VARIANCE ANALYSIS, AND PERFORMANCE EVALUATIONS

#### ASSIGNMENT OVERVIEW

T&P Fashion Shops

T&P Fashion Shops is a new chain that operates 10 stores in major malls throughout the United States. Each store manager is responsible for preparing a flexible budget for the store. T&P headquarters accumulates and analyzes the information for each store and in the aggregate.

Below is the forecast (budgeted income statement) for the Houston store showing the breakdown of fixed and variable expenses in columns two through four. The last column shows the actual results.

T&P Fashions – Houston Store
Breakdown of Expenses (Forecast)ForecastFixedVariableActualRevenues\$1,400,000\$1,260,000Cost of Sales790,000790,000760,000Gross Profit\$610,000\$500,000Management182,000154,70027,300182,000Shop assistants258,000154,800103,200262,000Rent23,20018,5604,64022,000Utilities34,80034,80031,000Misc. expenses24,50012,25012,25029,000Total expenses\$522,500\$526,000Net income\$87,500\$(26,000)==================

• Variable expenses are based on revenues and we assume that the percentage remains constant for flexible budgeting purposes.
• Fixed costs are all within the relevant range.
• Other expenses are all specific to this store. Headquarters pay for marketing and corporate overhead expenses.

#### CASE ASSIGNMENT

Required:

Computations (use Excel)

1. Prepare a flexible budget and show variances for the year that passed. Indicate whether the flexible budget variances are favorable or unfavorable.
2. Headquarters are contemplating charging each store a 5% marketing expense based on sales. How will that affect the operating profit of the store and the money available for managerial bonuses based on actual results for the past year? Summarize the information in a table.

Memo (use Word)

Write a 4- or 5-paragraph memo to the division manager explaining the flexible budget variances; how to interpret the information and what action, if any to take. Comment on the 5% marketing proposal too. Start with an introduction and end with a recommendation. Each of the four or five paragraphs should have a heading.

Short Essay (use Word)

• Discuss how to interpret static and flexible budget variances.
• What are the benefits of variance analysis? How can such analysis be detrimental rather than beneficial to the organization?

#### ASSIGNMENT EXPECTATIONS

Each submission should include two files: (1) An Excel file and (2) a Word document. The Word document shows the memo first and short essay last. Assume a knowledgeable business audience and use required format and length. Individuals in business are busy and want information presented in an organized and concise manner.

Double space

APA

Reference credible sources only

The following resources are not acceptable for this course, keep in mind, there are many others:

## Calculate the price of your order

Select your paper details and see how much our professional writing services will cost.

We`ll send you the first draft for approval by at
Price: \$36
• Freebies
• Format
• Formatting (MLA, APA, Chicago, custom, etc.)
• Title page & bibliography
• Amendments to your paper when they are needed
• 275 word/double-spaced page
• 12 point Arial/Times New Roman
• Double, single, and custom spacing

Our custom human-written papers from top essay writers are always free from plagiarism.

Your data and payment info stay secured every time you get our help from an essay writer.

Your money is safe with us. If your plans change, you can get it sent back to your card.

## How it works

1. 1
You give us the details
Complete a brief order form to tell us what kind of paper you need.
2. 2
We find you a top writer
One of the best experts in your discipline starts working on your essay.
3. 3
You get the paper done

## Samples from our advanced writers

Check out some essay pieces from our best essay writers before your place an order. They will help you better understand what our service can do for you.

## Perks of our essay writing service

We offer more than just hand-crafted papers customized for you. Here are more of our greatest perks.

• Swift delivery
Our writing service can deliver your short and urgent papers in just 4 hours!
• Professional touch
We find you a pro writer who knows all the ins and outs of your subject.
• Easy order placing/tracking
Create a new order and check on its progress at any time in your dashboard.
• Help with any kind of paper
Need a PhD thesis, research project, or a two-page essay? For you, we can do it all.
• Experts in 80+ subjects