Flexible budgets and basic variance analysis (DAC 203 Management Accounting)

Lamu Ltd. produces biscuits sold through supermarkets with budgeted standards for 2011, including costs for manufacturing, materials, and selling. The actual results showed variations in selling price, material costs, production rate, and fixed costs leading to a need for variance analysis and performance evaluation. The document discusses the establishment of standards, variance analysis methods, and performance appraisal in a decentralized organizational structure, highlighting the importance of measuring divisional performance through financial and non-financial metrics.