Beta Manufacturing Co.

Scenario: Budget Variance Analysis

Cost Category	Budgeted Amount ($)	Actual Amount ($)
Direct Materials	120,000	130,000
Direct Labor	80,000	75,000
Manufacturing Overhead	40,000	42,000

Requirements:

1. Variance Calculation:
   • Calculate the total variance and the price and efficiency variances for each cost category at Beta Manufacturing Co.

1. Flexible Budgeting:
   • Prepare a flexible budget for Beta Manufacturing Co. based on the actual production level, assuming a 10% increase in production from the budgeted level.

1. Performance Evaluation:
   • Evaluate the performance of Beta Manufacturing Co. by analyzing the budget variances for direct materials, direct labor, and manufacturing overhead.

1. Cost Control Measures:
   • Recommend two cost control measures that Beta Manufacturing Co. could implement to reduce the overall cost variances identified.

1. Strategic Cost Management:
   • Discuss how Beta Manufacturing Co. can use variance analysis to improve its cost management strategies and operational efficiency.