Rachael Hair Products Shows the Following Budgeted and Actual Data

Essay

Rachael Hair Products shows the following budgeted and actual data for the first quarter of the current fiscal year: Required:
1. What type of financial control system might the company use to determine whether the company met its short-term financial objectives?
2. For the first quarter of the year, what was the total master (static) budget variance?
3. In general, into what two component variances can the master (static) budget variance be decomposed? What is the meaning of each of these two variances?
4. Comment specifically on the financial performance of this company during the 1^st quarter.
5. What are the primary limitations of traditional financial-control models?