CBH Associates is reeling from a decline in profits because of competition. For its most recent year-end, its controller has prepared the following variance analysis and concluded that the company has done very well controlling its costs: Budgeted Actual Variance Variable Costs: Professional labour $ 1,000,000 $ 940,000 $ 60,000 F Travel 50,000 40,000.00 $10,000 F Supplies 100,000 90,000.00 $10,000 F Fixed Costs: Professional labour 400,000 405,000 -$5,000 U Facilities Csots 250,000 265,000 -$15,000 U Insurance 80,000 78,000 $2,000 F Total Costs $ 1,880,000 $ 1,818,000 $ 62,000 For the year CBH Associates projected that it would generate $2,000,000 of revenues; it actually generated $1,800,000.The company has consulted with you for help in understanding what is happening. You decide to address the following items. (Calculate on excel) Comment on the usefulness of the report above in performing cost control evaluation. Prepare an alternative performance report to enable more meaningful cost control evaluation (use flexible budgeting and identify volume and price variances).

CBH Associates is reeling from a decline in profits because of competition. For its most recent year-end, its controller has prepared the following variance analysis and concluded that the company has...

CBH Associates is reeling from a decline in profits because of competition. For its most recent year-end, its controller has prepared the following variance analysis and concluded that the company has done very well controlling its costs:

	Budgeted	Actual	Variance
Variable Costs:
Professional labour	$ 1,000,000	$ 940,000	$ 60,000	F
Travel	50,000	40,000.00	$10,000	F
Supplies	100,000	90,000.00	$10,000	F

Fixed Costs:
Professional labour	400,000	405,000	-$5,000	U
Facilities Csots	250,000	265,000	-$15,000	U
Insurance	80,000	78,000	$2,000	F

Total Costs	$ 1,880,000	$ 1,818,000	$ 62,000

For the year CBH Associates projected that it would generate $2,000,000 of revenues; it actually generated $1,800,000.

The company has consulted with you for help in understanding what is happening. You decide to address the following items. (Calculate on excel)

Comment on the usefulness of the report above in performing cost control evaluation.

Prepare an alternative performance report to enable more meaningful cost control evaluation (use flexible budgeting and identify volume and price variances).

Jun 08, 2022

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CBH Associates is reeling from a decline in profits because of competition. For its most recent year-end, its controller has prepared the following variance analysis and concluded that the company has...

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