Beta Retail Stores

Scenario: Budget Variance Analysis

Cost Category	Budgeted Amount ($)	Actual Amount ($)
Direct Materials	150,000	160,000
Direct Labor	100,000	95,000
Manufacturing Overhead	50,000	52,000

Requirements:

1. Variance Calculation:
   • Calculate the total variance and the price and efficiency variances for each cost category at Beta Retail Stores using marginal costing principles.

1. Flexible Budgeting:
   • Prepare a flexible budget for Beta Retail Stores based on the actual production level, assuming a 15% decrease in production from the budgeted level, incorporating marginal costing insights.

1. Performance Evaluation:
   • Evaluate the performance of Beta Retail Stores by analyzing the budget variances for direct materials, direct labor, and manufacturing overhead using marginal costing.

1. Cost Control Measures:
   • Recommend two cost control measures that Beta Retail Stores could implement to reduce the overall cost variances identified, considering marginal costing principles.

1. Strategic Cost Management:
   • Discuss how Beta Retail Stores can use variance analysis based on marginal costing to improve its cost management strategies and operational efficiency.