Topic: Budgeting and Control (Variance Analysis)

Concepts Covered: Material Price, Mix, Yield, Planning and Operational Variance

Description: This case is an exam based 20 marks Section C question, consisting Variance analysis of a Cake Company, that implements a new decision, due to which the Variances arise between the Original Budget to the actuals. It further discusses on the Bonus schemes attached to the performance of the Divisional Managers based on the Favourable variance generated. Finally, the case includes the need for the split between Planning and Operational Variance.