Analyse and interpret budget and actual financial

Analyse and interpret budget and actual financial information to monitor and review profit
and productivity performance
Scenario: As mentioned earlier that you have now crossed the first quarter of your operational plan,
you will need to analyse and interpret the store budget after the implementation of your operational
plan. The table below highlights the summary of budget that you will need to analyse.
SUMMARY OF BUDGET (For Resources and Operational Plan)
Resource Type Projected Budget Actual Performance Variance
Capital/Finance $150,000 (Profit) $120,000 (Profit) $30,000 UF
Human $200,000 (Expense) $200,000 (Expense) $0 =
Physical $250,000 (Expense) $260,000 (Expense) $10,000 UF
Based on the summary above, you will need to analyse, interpret and write a budget report (within
300 words) for management and explain the reasons of variations and for any underperformances.
BUDGET REPORT FOR MANAGEMENT
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labor.
- Evaluating the third type of resource, Physical we have a projected expense of $ 250,000 (expense),
and our current record was $ 2600,000 (expense), thus having a variation of $ 10,000, which
represents an unfavorable outcome. This result may be explained by the fact that the company in
these 3 months has invested in some improvements in the physical part of the company. Another
important point to take into consideration is that some items had a slight increase in their final price,
which impacted our budget.
3.3: Identify areas of under-performance, recommend solutions and take prompt action to
rectify the situation; Ensure mentoring and coaching are provided to support
Scenario: After the first quarter of your operational plan implementation, you have previously
identified some issues in budget and financial performance. Now you have also realised that there are
several areas of concerns within operations as well. First of all, you find that performance reports
database that there are several failures and some positives in meeting performance objectives by
your staff members and also in overall store KPIs. These include performance failures such as: