Finance Report: Cost Variance Analysis, Watley's Furniture, 2014-2015

This finance report analyzes cost variances for Watley's Furniture, focusing on the years 2014 and 2015. It begins with an overview of the business context and introduces key financial concepts. The report then delves into a detailed analysis, including break-even analysis and contribution margin analysis, demonstrating how changes in variable costs and overheads impacted profitability. The break-even point and contribution margin are calculated and discussed, highlighting the decline in profit from 2014 to 2015. The report concludes with recommendations, suggesting strategies to improve profit margins, such as reducing variable costs or increasing selling prices. References to relevant academic literature support the analysis.