6.47 Budget Variance CS

MRIS 121 - VL1

jane       doe

Budget over 3 years is 500,000. Microfilm services at .09 per page with total 5.5 million pages. At end of year 1, been billed for converting 2,083,333 pages.

1.       Determine your budget variance and what type it is.

$500,000/3years = $166,667 (how much should be spent per year). 2,083,333x0.09

= 187,499.97 (how much was spent in the first year). 166,667-187,500 = -20,833

2.       Provide a short explanation that can be given to administration regarding the variance.

The variance is unfavorable. It is unfavorable because the annual budget was less than the amount that was spent in a year.

The budget deviation of $20,083.30 for the microfilming project is a one-time negative fluctuation. The project's cost is spread out across three years, with the remaining years' costs balancing out. The number of pages sent in the third year will be constantly watched to ensure that the budget is not exceeded, and the number of pages sent will be modified accordingly. 861-864 (Revoir and Davis 2016).