Finance and accounting

Factors that explain the difference between the planned and the actual results:

Contingency; the budget planners did not include room for any contingency expense that could have arose from the planned budget. Therefore, this brought about the deficits from the books of accounting hence the slight difference between the actual and planned expenses.

Withdrawals by the partners; the company partners did withdraw their benefits before final calculations for the company were drafted hence this led to the actual calculations exceeding the planned calculations.

Charges per hour were fixed; on the contrary the number of working hours was not fixed; this per hour payment for repairs were ascertained but the number of the working hours were unknown, furthermore, there was no provision for any payment for overtime hours, in case the repairs were not completed in due time.

Miscellaneous, advertising, office rent and depreciation expenses were treated as fixed expenses; during the end year tabulations of results, advertising expenses were found to be $500 more than the planned amount, hence, this caused the deficits in terms of profits. On the other hand, miscellaneous expenses were found to be $100 less than the planned amount.

Taxation; the company didn’t provide any avenue for taxation expenses hence; this is one of the prime reasons why the planned profits was never achieved. The planned taxation had to be stated along with all the other possible portfolios.

Reconciliatory statement of planned versus actual profits;

Planned profits ($)Actual profits ($)

Contingency 5074537914

Withdrawals 115001400

Per hour charges7820098400

Miscellaneous 1000

Advertising 0500

Taxation (30%)196920199251

Totals 337465337465

Flexed budgets on the volume of jobs;

Types of jobscost ($)/hourrevenue ($)

Band major repairs40(390)15600

Band minor repairs30(1830)54900

Orchestral major repairs30(540)16200

Orchestral minor repairs28(1560)43680

Rush jobs20(50)1000

Flexed budgets on expenses;

Type of expensecostsrevenue

Miscellaneous44000

Advertising120000

Depreciation36000

Office rent64000

How compensations arrangements affects profits;

The annual salary for the three partners of $60,000 and 5% sales revenue for the three partners is too much for the company since the total profit outcomes is not adequate to cater for the excessive reward package.

The charge per hour of $20 dollars is unaccounted for since, there is no apparent strategies set out to follow up on the laborers to ascertain for the time that they spend performing their tasks.

The company does employ workers in relation to their past experiences, they ought to consider employing subsidiary personnel who have qualifications but can be enrolled as interns. This will reduce the cost greatly hence maximum profits can be realized.

Recommendations;

The company should consider hanging their compensation arrangements for their partners; it should be greatly to a significant amount that will not affect the profits of the company as well as the sales revenue.

The company should also consider employing workers in respect to qualifications and not based on their past experiences, this will greatly reduce the expenses of the company.

The expenses should not be treated as fixed charges, but as flexible charges. This is because charges changes with time and are not constant.