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10.10: Putting It Together- Cost Variance Analysis

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    45947
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    So in Module 9 we prepared the budgets for Hupana Running Company. In Module 10, we put those budgets to work, as Mary, our production manager and Ben, our purchasing manager worked through a variety of issues and challenges to maintain profitability.

    So, as you may now see, the budget is the first step of a very important process. Without using experience and analysis, the budget is just a piece of paper. What we do with that piece of paper, and how we use it to improve our company is the goal.

    How can we make that happen?

    • Finding the best raw materials at the best price (even if it is higher than budgeted, but reduces production time).
    • Hiring great people and training them well. Keeping them involved in the processes of budgeting and analyzing. They know what they do and how they do it!
    • Maintaining the equipment to limit downtime.
    • Using the budget as a living tool, that we can use to evaluate the health and profitability of our company!

    So how important is analyzing costs, processes and systems?

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    • Putting It Together: Cost Variance Analysis. Authored by: Freedom Learning Group. Provided by: Lumen Learning. License: CC BY: Attribution

    10.10: Putting It Together- Cost Variance Analysis is shared under a not declared license and was authored, remixed, and/or curated by LibreTexts.

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