you are an operational accountant for Put It Together, an organization that manufactures arts and crafts supplies. You are responsible for distributing the monthly budgeting reports, which show the actual results versus the budgeted projections. The vice president $($VP$)$ of the western division of Put It Together, one of the stakeholders who relies on the accuracy of the master budget, has requested information about favorable direct material and unfavorable direct labor variances. The VP has asked you to write a memo that describes cost structures and types of costs. The skills practiced in this activity will help to support you in your project.

Directions

Write a memo that describes cost structures the organization can use and the types of costs within the organization. Specifically, you must address the following rubric criteria:

Describe the stakeholders who might interact with and rely on the master budget to make decisions.

Explain how stakeholders use the information in the master budget to make decisions.

Explain why the accuracy of the master budget is critical to the organization.

Explain the ethical implications of the budgeting process in the organization.

Evaluate the function of cost data in variance analysis in operational performance measurement.

Determine the variance analyses associated with direct materials, direct labor, and manufacturing overhead.

Determine factors that impact the accuracy of the master budget. Consider the following:

Causes for a favorable direct material variance

Causes for an unfavorable direct labor variance