Advance Variances

QUESTION As a result of the results in January to March, Kamal Co reconsidered its approach to budgeting and adopted a form of rolling budgeting, starting in April for the next twelve months. The budgeted figures for the remainder of the year before the rolling budget was introduced were as follows: $ April-June 550,000 July-September 560,000 October-December 575,000 Kamal Co amended the budget so that budgeted sales for April-June were 20% higher than in the original budget, and then increased by 5% in July-September and October-December. It did not subsequently amend the budget for July-September. Actual sales for July-September were $610,000. Calculate the difference in the total sales operational variance, using the original budgeted and revised (rolling) budgeting figures. ANSWER Variance calculated using original budget = $610,000 – $560,000 = $50,000 F Revised budget = $550,000 × 120% × 105% = $693,000 Variance calculated using revised budget = $610,000 – $693,000 = $83,000 A Difference = $50,000 + $83,000 = $133,000 My question is why do they minus $560000 from $610000 if the question asks us to find operational variance?