Description
analyze performance budget relative to budget and written report.
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Running Head: CARROLL CLINIC FLEXIBLE BUDGET
Carroll Clinic Flexible Budget
Student’s Name
Instructor’s Name
Date
1
CARROLL CLINIC FLEXIBLE BUDGET
2
(a). Carroll Clinic Flexible Budget for 2015
Creating a flexible budget helpful in computing variances that can help Carroll Clinic
understand why actual results differed from its expectations. Carroll Clinic will use a flexible
budget to adjust its master budget for its actual volume of production. For instance, Carroll’s
Clinic master budget will assume that its actual size of production units is 1,850,000; however,
its budget production units 1,893,000. Therefore, there will be a rearrangement of the master
budget by the flexible budget to reflect these new units; this would make all the appropriate
adjustments to sales and expenses based on the unexpected change in volume. Thus, to prepare a
flexible budget, Carroll Clinic needs a master budget, know the actual size of goods produced
and sold and understand cost behavior. Consider Carroll Clinic. Carroll Clinic’s accountant
would prepare an overhead budget as shown below.
Carroll Clinic
Overhead Budget Report
For the Year Ended 31st December 2015
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CARROLL CLINIC FLEXIBLE BUDGET
Budget
Actual ($)
Variance
($)
Variable Cost per
Flexible Unit
Unit
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑪𝒐𝒔𝒕 unfavorabl
𝒃𝒖𝒅𝒈𝒆𝒕
𝟏,𝟖𝟗𝟑,𝟎𝟎𝟎
Production
Favorable/
× 𝟏, 𝟖𝟓𝟎, 𝟎�...