Answer to Part 1:

Answer to Part 2:

Improvement in Budgeting Process

The continuous improvement can be initiated in the process of budgeting. The consumption of direct material can be enhanced either in the price and usage. Recommendations can be provided in enhancing the present use of direct materials after lowering the minimum usage by 1 square meter for both the oak tops and oak legs. The application of flexible usage can be used for business where cost can be closely associated with the business activity (Rogulenko et al. 2016). In the event of retail environment, the cost of overhead can be separated and the same can be considered as the fixed cost. Similarly, these cost can be allocated with the oak tops and oak legs and simultaneously can be related with the revenue generation unit.

Importantly, variance analysis can be helpful in managing the differences between the budgeted cost and actual costs (Christ and Burritt 2015). The variance analysis can be applied for oak tops and oak legs as this would assist in implementing control over the project expenses by understanding the planned costs against the original costs.  

One of the vital aspect of budget variance is a qualitative investigation can be conducted amid the actual cost and scheduled behaviour. Application of budget variance would help in controlling the business costs. Furthermore, recommendations can be provided in the areas of establishing the use of quarterly budget as this would help in financial planning for the business (Kohlmeyer et al. 2014). The application of quarterly budget would help the CEO of Exhibition Furniture in looking at the trouble that is prevalent and creating a appropriate framework for determining the performance of the business.  

The application and preparation of quarterly budget would enable the management of Exhibition Furniture in thinking and planning the future for a particular production period during the accounting year. With the quarterly budget the management would be able to analyse the actual performance from the budgeted performance (Eldenburg et al. 2016). The preparation of the quarterly budget would help the CEO of Exhibition Furniture in lowering the cost in accordance with the needs of product to better improve the profitability for every desk chair. Quarterly budget would provide the management with details of the budget components ranging from fixed costs, semi-fixed and variable costs.     

On a concluding note the memorandum provides the appropriate recommendations which would assist the Exhibition Furniture CEO in recognizing and eliminating the unwanted cost. The preparation of the alternative quarterly and flexible would assist in improving the profitability of the organization.

Reference List:

Christ, K.L. and Burritt, R.L., 2015. Material flow cost accounting: a review and agenda for future research. Journal of Cleaner Production, 108, pp.1378-1389.

Eldenburg, L.G., Wolcott, S.K., Chen, L.H. and Cook, G., 2016. Cost management: Measuring, monitoring, and motivating performance. Wiley Global Education.

Kohlmeyer III, J.M., Mahenthiran, S., Parker, R.J. and Sincich, T., 2014. Leadership, Budget Participation, Budgetary Fairness, and Organizational Commitment. In Advances in Accounting Behavioral Research (pp. 95-118). Emerald Group Publishing Limited.

Rogulenko, T., Ponomareva, S., Bodiaco, A., Mironenko, V. and Zelenov, V., 2016. Budgeting-Based Organization of Internal Control. International Journal of Environmental and Science Education, 11(11), pp.4104-4117.