1. Budget Variance Analysis

Data:

• Budgeted Production Costs: $500,000
• Actual Production Costs: $550,000
• Budgeted Output: 10,000 units
• Actual Output: 9,500 units

Requirements:

1. Calculate the total cost variance.
2. Determine whether the variance is favorable or unfavorable.
3. Analyze the reasons for the variance.
4. Suggest cost control measures to prevent future variances.