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The question is no 326 Woodside. In part a, I need to make an operating statement between budgeted surplus and actual shortfall. But I don’t think you explained operating statement for this type instead you explained for budgeted profit and actual profit.
It is exactly the same approach as for a normal variance operating statement – the examiner made it a charity as a way of checking peoples understanding (as opposed to simply learning ‘formulas’ for the variances).
Because it is a charity then instead of referring to a profit they call it a surplus, and instead of referring to a loss they call it a shortfall.
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