You are the management accountant of MB plc, a company producing electrical goods. The MD has asked you to analyse the performance of one of its products the 'Toastie', which has performed poorly in the financial year just ended.
The budgeted information for the year is as follows:

Required:

1. Calculate the relevant sales and operational variances from the data above.
2. Produce a report to the Managing Director, ensuring you include a possible explanation for each variance you have calculated
3. Also provide advice as to what future action should be taken with this product.
4. Varianceanalysisisausefultooltoassistmanagerswithperformance measurement but is dependant upon an effective budgetary process. What is the sequence of events you would expect to be performed by a business when producing its budget?