Jet Task 2

JET Task 2

COURSE

NAME

DATE

Executive Summary 4

Specific budgetary items for concern in budget planning 5

Budget Planning 5

Concerned Budgetary Items 5

Sales Units 5

Sales Price 6

Quality Control 6

Remaining Budgetary Items 7

Evaluation of the flexible budget and its variances 7

Flexible Budget 7

Variances 8

Detailed Variance Analysis and Recommendations 8

Revenue and Spending Variances 8

1. Sale Variance 8

2. Direct Material Variance 9

Recommendation 9

3. Direct Labor Variance 9

Recommendation 10

4. Manufacturing Overhead-Variable 10

Recommendation 10

5. Transportation Out 11

Recommendation 11

6. Contribution Margin 11

Recommendation 11

7. Fixed expenses 12

Activity Variances 12

Application of the Management by Exception to the Variances 13

Management by Exception 13

MBE application to the Variances 13

Works Cited 15

Appendices 17

Executive Summary

This whole report is about the topic of the budget concern, flexible budget and the MBE (i.e. Management By Exception). In this report, it is elaborated that what is the budget planning and also evaluate in depth the budgetary items that requires management concerns. In the selection of the budgetary items, detailed analysis of the budgets of the Competition Bikes, Inc. is made. The detailed reasoning of why the concern budgetary items are too high or too low is made. In the middle section of the report, evaluation of the flexible budget is made in detail by doing the variance analysis of the line items. It is also explained in the report that why the individual line item result in the favorable variance or the unfavorable variance. Moreover proper recommendations of the individual line item are made for the management regarding how the management of the company can get control of the unfavorable variances. At the end of the report, the concept of the Management by Exception is elaborated and the line items that require the application of the...