Company: Xi Retail Stores

Scenario: Budget Variance and Performance Analysis

Department	Budgeted Costs ($)	Actual Costs ($)	Budgeted Revenue ($)
Electronics	300,000	320,000	400,000
Apparel	400,000	380,000	500,000
Home Goods	200,000	210,000	250,000

Requirements:

1. Variance Analysis:
   • Calculate the cost variances (both total and for each department) and revenue variance for Xi Retail Stores using marginal costing principles.

1. Flexible Budgeting:
   • Prepare a flexible budget for Xi Retail Stores based on the actual activity level, assuming a 5% increase in sales from the budgeted level, incorporating marginal costing insights.

1. Performance Evaluation:
   • Evaluate the performance of each department at Xi Retail Stores based on the variances identified in the budget variance analysis using marginal costing.

1. Cost Control Measures:
   • Recommend two cost control measures that Xi Retail Stores could implement to reduce the overall cost variances identified, based on marginal costing analysis.

1. Strategic Financial Planning:
   • Discuss how Xi Retail Stores can use budget variance analysis and marginal costing to improve its financial planning and operational efficiency.