[lethabo]

The directors feel that there are problems with some of the income and expenditure items.at the end of October 2012,they compared the actual figures with the budgeted figures and discovered the following differences in some of the items.provide one point of advise to the directors for each of the items below.
1.
Cash sales budgeted 288000 actual 260000 difference of -28000
2. rent income budgeted 8400 actual 2000 difference -6400
3.telkom and cell phone cost budgeted 26000 actual 33844 diff +7844
4. delivery vehicle costs budgeted 8940 actual 17600 diff +8660
5.sundry expense budgeted 40000 actual 22000 diff -18000

[pready]

What is your question.

1. You had less cash sales than was budgeted.
2. Your rent income was less than anticipated.
3. Your cell phone cost was more than budgeted for.
4. Your delivery vehicle costs was more than budgeted for.
5. Your sundry expenses were less than budgeted for.

You have to tell the directors why for the differences in the 5 accounts above. If this is homework you will need additional information. If this is real life you have to explain why for the differences. As an example; There was a downturn in the economy, which means that consumers having less disposable income that resulted in less sales and fewer equipment rentals than was anticipated.

[Fidget1]

The advice to give in respect of each one is the same: Review how the budgeted figures were arrived at.

Many factors are considered when setting budgets and if there's notable variations between budget and actual then, outside of unforeseen circumstances, something is wrong with the budgeting process and only by looking at how the budgeted figures were produced can you pinpoint the reason(s) for the variation between budget and actual.