Budget Variance Analysis Paper

1. 1 (Static versus flexible budget variances) Answer all questions posed by Case ATC 8-1.

a) Did Atlantic increase unit sales by cutting prices or by using some other strategy?
No, the sales did not increase by cutting prices. This is because the budgeted price is lower than the actual sales.
• Budgeted sales $33,000,000 / 150,000 units = $220
• The actual sales price is $35,520,000/160,000 units = $222/unit.
Although there is an increase in sale, this increase can be attributed to other factors like advertising.

b) Is Mr. Ludwig correct in his conclusion that something is wrong with the company's performance evaluation process? If so, what do you suggest be done to improve the system?
Yes, He was correct by concluding that the company

Budgets are part of the strategic management plan in any organization. Prices and volumes of goods sold are indicated in the budget too. Thus they play a significant role in determining the performance of a company according to the budget (Jamal, Suript0, & Syahputra, 2016). Therefore, expected sales are determined in advance through the use of budget. Products and services are hence planned for earlier on their pricing. Some factors that push for the budgeting are strategic pricing, expenditures, and

Production of the employee comes in the submission of employees' work if employees complete their work on time, and the range of errors found in employees submitted work. Also, how customers respond helps in this section: are customers complaining about services from the employees or are they fit with such services? Also, how the employees work at their places of work help in determining the performance evaluation (Eisner, 2017). Also, how the employees consider working according to the stipulated targets, work well for assessing the performance