1.Mix and yield variances explain to a manager how substitution of material or direct labor will affect the product produced. Please explain the reasons for making such substitutions, including what a manager may be trying to accomplish with the change. That is, in some cases a change in mix and/or yield may be done deliberately by a manager. What do you believe a manager might be attempting to accomplish with such a change? Would such a change affect the standard information used in your calculations in future periods? Why or why not?
2.The textbook states that the cash budget is one of the most important parts of the master budget. There are several reasons listed as to why a cash budget is considered to be this important; I would like your thoughts as to why you consider the cash budget to be this important. How does the granting of credit to customers (and to your company from suppliers) affect your answer? What happens when you face a cash shortage? Is there something that can be “built in” the budget that considers such a situation and incorporates it into the master budget? What happens to the cash budget when you face an unforeseen emergency requiring cash?