Asked by Abraham Fazliddinov on Jul 24, 2024
Verified
Roberds Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting:
In March, the school budgeted for 1,760 students and 73 courses. The school's income statement showing the actual results for the month appears below:
Required:Prepare a flexible budget performance report showing both the school's activity variances and revenue and spending variances for March. Label each variance as favorable (F) or unfavorable (U).
Vocational School
An educational institution that provides specialized instruction and training in a particular career or technical field.
Flexible Budget
A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable cost situations.
Activity Variances
Discrepancies between planned or standard costs to perform an activity and the actual costs incurred.
- Understand how to construct an adaptive budget that reflects accurate activity levels.
- Cultivate the skill to compute and comprehend variations from the budget, encompassing both profitable and unprofitable discrepancies.
- Gain expertise in overseeing and financial planning for diverse measures of activity in service sectors.
Verified Answer
Learning Objectives
- Understand how to construct an adaptive budget that reflects accurate activity levels.
- Cultivate the skill to compute and comprehend variations from the budget, encompassing both profitable and unprofitable discrepancies.
- Gain expertise in overseeing and financial planning for diverse measures of activity in service sectors.
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