Submit your quantitative analysis with a memo to management.

Prepare a Memo to Management

a) Summarize your quantitative analysis based on your findings (include answers to all questions in Sections I, II, and III).

b) Report the parts of the budgeting process that are in need of improvement. Provide suggestions to improve those parts.

c) Report overall improvement recommendations to management. Consider the ethical implications when communicating sensitive information.

		Budgeted Unit	Actual Volume	Flexible Budget
		Amounts		Amount
Revenues		$21.00	47,000	$987,000
Variable Costs
DM-Plastic		0.75	47,000	32,250
DM-Cedar		4.50	47,000	211,500
Direct Manuf. Labor		6.00	47,000	282,000
Variable Manuf. Overhead		0.06	47,000	2,820
Total Variable Manufacturing Costs		11.31	47000	531,570
Fixed Manufacturing Overhead				95,000
Total Manufacturing Costs				626,570
Gross Margin				$360,430

				Price Variance		Efficiency Variance
Direct Materials - Cedar				-22560		-14100
Direct Materials - Plastic				1034		-3525
Direct Labor				5640		-56400
				Spending Variance		Efficiency Variance
Variable Manufacturing Overhead				-235		470

Budget Model					From Flexible Budget Calculations Sheet
		Actual	Flexible Budget Variance	Favorable/ Unfavorable	Flexible Budget	Sales Volume Variance	Favorable/ Unfavorable	Static Budget
Units Sold		47,000			47,000			50,000
Revenues		$991,700	$4,700	Favorable	$987,000	($63,000)	Unfavorable	$1,050,000
Variable Costs
DM-Plastic		$ 37,741	$ (2,491)	Unfavorable	$ 32,250	$ 2,250	Favorable	$ 37,500
DM-Cedar		$ 248,160	$ (36,660)	Unfavorable	$ 211,500	$ 13,500	Favorable	$ 225,000
Direct Manuf. Labor		$ 332,760	$ (50,760)	Unfavorable	$ 282,000	$ 18,000	Favorable	$ 300,000
Variable Manuf. Overhead		$ 2,585	$ 235	Favorable	$ 2,820	$ 180	Favorable	$ 3,000
Total Variable Costs		$ 621,246	$ (89,676)	Unfavorable	$ 531,570	$ 33,930	Favorable	$ 565,500
Fixed Manuf. Overhead		$ 94,500	$ 500	Favorable	$ 95,000	$ -	Favorable	$ 95,000
Total Costs		$ 715,746	$ (89,176)	Unfavorable	$ 626,570	$ 33,930	Favorable	$ 660,500
Gross Margin		$ 275,954	$ (84,476)	Unfavorable	$ 360,430	$ (29,070)	Unfavorable	$ 389,500