Answer:LawnMate Company to monitor its financial performance, identify areas of concern, and make necessary adjustments to achieve its financial goals.
Step-by-step explanation:
The LawnMate Company manufactures power mowers that are sold in the United States and Canada. The company follows a comprehensive budgeting process to plan and control its financial activities.
When comparing actual results to budgeted amounts, the company can gain insights into its performance and identify any deviations or variances. This helps in evaluating the effectiveness of its budgeting process and making informed decisions for future periods.
Here are a few ways the company can compare actual results to budgeted amounts:
1. Sales: The company can compare the actual sales revenue achieved with the budgeted sales revenue. This allows them to assess their sales performance and understand if they met their targets or exceeded them.
2. Costs: The company can compare actual costs incurred with the budgeted costs. This includes costs such as production costs, materials, labor, and overhead expenses. By analyzing the differences, they can identify areas where costs were higher or lower than anticipated and take appropriate actions to control expenses.
3. Profitability: The company can compare the actual profitability with the budgeted profitability. This involves comparing the actual net income or profit earned with the budgeted net income. By doing so, they can determine if they achieved their profit targets or if there were any deviations that need attention.
4. Cash flow: The company can compare actual cash flows with the budgeted cash flows. This involves comparing the actual inflows and outflows of cash with the budgeted amounts. It helps them assess their cash management and ensure they have enough cash to meet their financial obligations.
Overall, comparing actual results to budgeted amounts allows the LawnMate Company to monitor its financial performance, identify areas of concern, and make necessary adjustments to achieve its financial goals.