Topic 3.9: Budgets Questions

Greenhill Dairy is a family farm that sells milk and cheese to local shops. Table 1 shows its budget for 2025 (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Sales revenue | 2 400 | 2 550 | 150 [F] | | Animal feed costs | 600 | 680 | W | | Vet costs | 90 | 80 | 10 [F] | | Wages | 1 010 | 1 000 | 10 [F] | | Profit for period | 700 | 790 | 90 [F] | Using Table 1, calculate Greenhill Dairy’s animal feed costs variance, W, and state if it is adverse or favourable (no working required).

Norhaven Hospital runs its maintenance department as a cost centre. Table 1 shows the department’s budget for the third quarter of 2025 (all figures in $). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Maintenance staff wages | 120 000 | 118 000 | 2 000 [F] | | Spare parts and materials | 45 000 | 51 000 | W | Using Table 1, calculate the spare parts and materials variance, W, and state if it is adverse or favourable (no working required).

Brightlines Studio takes wedding and family photographs. Table 1 shows its budget for the first half of 2026 (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Sales revenue | 620 | 600 | 20 [A] | | Studio rent | 120 | 120 | 0 | | Staff costs | 260 | 270 | 10 [A] | | Equipment hire | 60 | 60 | 0 | | Excess of revenue over costs | 180 | 150 | W | Using Table 1, calculate Brightlines Studio’s excess of revenue over costs variance, W, and state if it is adverse or favourable (no working required).

Brightpath Tutors gives private lessons to school students. Table 1 shows its budget for the spring term of 2026 (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Sales revenue | 150 | 165 | | Excess of revenue over costs | 40 | 38 | | Total costs | 110 | Y | Using Table 1, calculate Brightpath Tutors’ actual total costs, Y (no working required).

Kestrel Outdoor Gear sells tents and walking boots online. For 2025 its marketing department was given a budget of $90 000. By the end of the year it had spent $84 000. Calculate Kestrel Outdoor Gear’s marketing cost variance for 2025 and state whether it is adverse or favourable (show all your working).

Coastal Coaches runs bus tours along the coast. Fuel prices fell during the year. Table 1 shows its budget for 2025 (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Ticket revenue | 1 200 | 1 080 | 120 [A] | | Fuel costs | 350 | 320 | W | | Drivers’ wages | 400 | 410 | 10 [A] | | Other costs | 200 | 200 | 0 | | Profit for period | 250 | 150 | 100 [A] | Using Table 1, calculate Coastal Coaches’ fuel costs variance, W, and state if it is adverse or favourable (no working required).

Petal and Stem Florist sells flowers for weddings and funerals. Table 1 shows its budget for 2025 (all figures in $). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Sales revenue | 160 000 | 171 000 | | Total costs | 112 000 | 118 500 | | Excess of revenue over costs | 48 000 | 52 500 | The variance on Petal and Stem Florist’s excess of revenue over costs is 4 500. Determine whether this variance is favourable or adverse (no working required).

Harbour Museum runs a café for its visitors. Table 1 shows the café’s budget for 2025 (all figures in $). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Café revenue | 35 000 | 31 500 | | Café staff costs | 18 000 | 17 000 | The variance on Harbour Museum’s café revenue is 3 500. Determine whether this variance is favourable or adverse (no working required).

Suds Laundry runs a self-service launderette. Table 1 shows its budget for 2025 (all figures in $). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Sales revenue | 90 000 | 90 500 | | Electricity costs | 6 000 | 7 200 | | Rent | 12 000 | 12 000 | The variance on Suds Laundry’s electricity costs is 1 200. Determine whether this variance is favourable or adverse (no working required).

Brookside Cinema shows films in a small town. Table 1 shows selected budget information for Brookside Cinema for June 2026 (all figures in $). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Ticket sales revenue | 200 000 | 214 000 | X | | Film hire costs | 80 000 | 85 600 | 5 600 [A] | Using Table 1, calculate Brookside Cinema’s ticket sales revenue variance, X, and state if it is adverse or favourable (no working required).

Lotus Yoga Studio runs classes in a rented hall. Table 1 shows its budget for March 2026 (all figures in $). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Sales revenue | 30 000 | 32 000 | | Instructors’ wages | 12 000 | 13 000 | | Rent | 4 000 | 4 000 | | Mats and towels | 1 500 | 2 200 | | Total costs | 17 500 | Y | Using Table 1, calculate Lotus Yoga Studio’s actual total costs, Y (no working required).

Redline Garage repairs and services cars. Table 1 shows selected budget information for 2025 (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | |---|---|---| | Sales revenue | 800 | 760 | | Total costs | 610 | 590 | | Excess of revenue over costs | X | 170 | Using Table 1, calculate Redline Garage’s budgeted excess of revenue over costs, X (no working required).

Veloce Motors makes electric cars. Its design team in the head office creates each new model. The cars are sold through four regional showrooms, each run by a manager who is responsible for its sales and its costs. With reference to Veloce Motors, distinguish between a cost centre and a profit centre.

Lantern Theatre stages plays in a small city. Table 1 shows its budget for the 2025 season (all figures in $000s). | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Ticket revenue | 520 | X | 35 [A] | | Actors’ fees | 210 | 200 | 10 [F] | | Marketing costs | 40 | 48 | 8 [A] | Using Table 1, calculate Lantern Theatre’s actual ticket revenue, X (no working required).

Pine Hollow Campsite has 80 pitches for tents and caravans. Table 1 shows its budget for July 2026. | July 2026 | Budgeted | Actual | |---|---|---| | Average number of pitches booked a day | 50 | 46 | | Price per pitch a night ($) | 25 | 25 | | Days in the month | 31 | 31 | Using Table 1, calculate Pine Hollow Campsite’s change in revenue variance for July 2026, and state whether it is adverse or favourable (show all your working).

Hillside Orchards is a cooperative of 40 apple growers. Its members have seen apple prices fall. Table 1 shows its budget for 2025 (all figures in $000s). [A] = adverse variance; [F] = favourable variance. | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Sales revenue | 3 000 | 2 700 | 300 [A] | | Picking wages | 800 | 950 | 150 [A] | | Storage costs | 200 | 230 | 30 [A] | | Marketing | 100 | 90 | 10 [F] | | Other costs | 900 | 900 | 0 | | Profit for period | 1 000 | 530 | 470 [A] | Explain why the members of Hillside Orchards should be concerned by the information in Table 1.

Maple Toys makes wooden toys, jigsaw puzzles and board games, all sold under the Maple name. Board games sell well; jigsaw sales are falling. The directors want each product line to become a profit centre. Explain one advantage and one disadvantage for Maple Toys of turning its three product lines into profit centres.

Tamarind Kitchen is a chain of five restaurants. It has never used budgets: each restaurant manager spends as needed and the owner looks at the profit once a year. A new finance manager wants each restaurant manager to agree a monthly budget with her. Explain one advantage and one disadvantage for Tamarind Kitchen of setting budgets.

Quayside Car Park charges a flat fee per car per day. Table 1 shows its budget for February 2026. | February 2026 | Budgeted | Actual | |---|---|---| | Average number of cars parked a day | 400 | 385 | | Price per car a day ($) | 8 | 8 | | Days in the month | 28 | 28 | Using Table 1, calculate Quayside Car Park’s change in revenue variance for February 2026, and state whether it is adverse or favourable (show all your working).

Old Mill Brewery makes beer for pubs in its region. Several pubs have closed this year. Table 1 shows its budget for 2025 (all figures in $000s). [A] = adverse variance; [F] = favourable variance. | Financial variable | Budgeted figure | Actual figure | Variance | |---|---|---|---| | Sales revenue | 1 500 | 1 380 | 120 [A] | | Hops and malt | 300 | 345 | 45 [A] | | Staff costs | 400 | 400 | 0 | | Energy | 120 | 150 | 30 [A] | | Excess of revenue over costs | 680 | 485 | 195 [A] | Explain why the owners of Old Mill Brewery should be concerned by the information in Table 1.