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A more detailed example:
Sales in May were 5 million RWF.
Sales in June were also 5 million RWF, but the budgeted sales were 6 million RWF.
The variance analysis would look at why were sales below budget? Was there an error in the budget?
When investigating, we note:
June sales were supposed to be 20% higher because a new product was supposed to launch
Talking to product manager, we find out the launch was delayed by a month
The forecast can be adjusted to move the 1 million francs increase in sales to the next month
Let’s get into a more detailed example to further illustrate budget to actual reporting
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