Expenses Details Actual ($) Budget ($) Variance ($)

Expenses Details Actual ($) Budget ($) Variance ($)

Rent 16,000 15,000 1,000
Advertising 220,000 250,000 30,000
Office Salaries 550,000 500,000 50,000
Promotion 150,000 140,000 10,000
Total 936,000 905,000 31,000

Jack had great difficulty understanding the report, as he hadn’t been told what a variance is and didn’t understand the concept of budgetary control. He thought the report was rather unfair, as Office salaries included salaries of accounting and administrative staff over whom he had no control. Also, the rent paid, although relating to his department, was negotiated by the managing director. Jack raised these concerns with the accountant, who told him that he was not expected to do anything about the report; it was only ’for the record’.

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