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Communicating Accounting Information Communicating Accounting Information Date: 23/02/2019 1 Communicating Accounting Information 2 Part2: Prepare a memo to a subordinate asking for clarification of the variances found in a performance report and suggest possible causes and remedies. Memo; Widget Company To: Widget company owner From: Company Manager Date: February 23, 2019 Subject: Widget company performance report Variances in the report The company has been experiencing unfavorable variances. This is because the actual cost exceeds the standard cost that's set by the company. These differences are brought in by the amount set aside for meeting variable cost. Sometimes, we as the executive of the company set underprices for the products, and emergencies also at times tend to happen in the company. Therefore, this variances does not imply the company is underperforming, and it's as a result of unaccounted risk and losses that arise during the day- day operation of the company. Causes of the variances There have been higher adjustments of the variable cost in the company. These unfavorable always arises because there arise factors in the company that requires immediate attention. The funds set to cater for this case is usually used. In return, the amount set as the actual funds to be used over the year tends to be lower as compared to the amount in the flexible budget. This variance is also caused by overhead and idle labor variances in the company (Marlowe, 2009). Co ...
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