Omega Retail Stores

Scenario: Budget Preparation

Department	Budgeted Costs ($)	Actual Costs ($)	Budgeted Revenue ($)
Electronics	200,000	220,000	300,000
Apparel	300,000	290,000	400,000
Home Goods	150,000	160,000	200,000

Requirements:

1. Variance Analysis:
   • Calculate the cost variances (both total and for each department) and revenue variance for Omega Retail Stores.

1. Flexible Budgeting:
   • Prepare a flexible budget for Omega Retail Stores based on the actual activity level, assuming a 10% increase in sales from the budgeted level.

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

1. Cost Control Measures:
   • Recommend two cost control measures that Omega Retail Stores could implement to reduce the overall cost variances identified.

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