Solution-Prepare a budget report which compares the revised

Prepare a budget report which compares the revised budget

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Reference no: EM132426842

Question - Midshire County Council owns Littleton Park, a stately home and grounds, which it operates as the Museum of Country Life from the beginning of May to the end of September each year. The following budget was prepared for the previous year:

	£
Income (entry fees, refreshments, etc.)	500,000
Variable costs	100,000
Contribution	400,000
Fixed Costs	350,000
Profit	50,000

Estimates were based on an average of 10,000 people admitted per month for each of the five months of the season. As a result of good weather, admissions were 10% above target for the first two months. However, owing to a decline in the weather and some widely reported acts of vandalism, admissions fell to 10% below target for the last three months. Moreover, extra security staff had to be hired at a cost of £20,000. (This is a stepped fixed cost.)

The actual figures for the season were:

Income £ 430,000

Variable costs £ 93,100

Fixed costs £ 375,000

Required: (a) Prepare a budget report which compares the revised budget to the original budget and the actual results to the revised budget.

(b) Comment briefly on the budget report.

Reference no: EM132426842

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Prepare a budget report which compares the revised budget

Reference no: EM132426842

Reference no: EM132426842

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