Due to global warming, demand for milk shares was much larger than expected. The amount of large milk shakes actually sold in January were 85,000 (10,000 over budget) while the amount of small milk shakes actually sold in January were 45,000 (5,000 under budget).
The budgets prepared above were planned prior to the beginning of the year and are valid for the planned level of sales activity.
If the actual level of sales activity differs from the planned level, comparing our budgets above with actual results may lead to incorrect conclusions about performance. Prepare a FLEXBLE budget that adjusts revenues and expenses given the actual level of sales activity that occurred.
