Suppose Liam Specialties decides to incorporate continuous improvement into its budgeting process. Select two areas where it could incorporate continuous improvement into the budget schedules in requirement 1. Only by reducing the budget on a monthly basis for the amounts of fixed overhead can Liam Specialties continually improve fixed manufacturing overhead. Direct manufacturing labor can incorporate continuous improvement by revising the budgeted usage of 12 hours and 13 hours on a monthly basis. a. To continually improve the direct material usage budget, the company should verify that the beginning inventory is as low as possible to decrease the materials used during production. b. Liam Specialties can continually improve variable manufacturing overhead by budgeting more efficient use of the allocation base. c. By increasing the target ending finished goods inventory, Liam Specialties will reduce the production budget therefore continually improve the direct material purchases budget.