1. Operating Budget Create an operating budget using the Final Project Part I Student Worksheet.
a) Prepare a sales budget. Ensure accuracy of data.
b) Prepare a production budget. Ensure the accuracy of your data.
c) Prepare a manufacturing budget. Ensure the accuracy of your data.
d) Prepare a selling expense budget. Ensure the accuracy of your data.
e) Prepare a general and administrative expense budget using appropriate costing methods.
Budget Variance Analysis The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hour of $15.
a) Develop a variance analysis including a budget variance performance report and appropriate variances for materials and labor. Use the budget variance student worksheet provided.
b) In your budget variance report, discuss each variance. What does the variance tell you?
c) In addition, your budget variance report should cover the following: What needs to be investigated to determine the reason for the variance? Why?