Business Finance
Flexible Budgets and Performance Analysis Questions

Question Description

I’m studying for my Accounting class and need an explanation.

i need help with the homework. i uploaded also the pdf file for the chapter.

that there are two tabs- questions 1, 2, and 3 are on the first tab and question 4 is on the second tab. Question 4 has parts a, b, and c. Make sure to complete all parts.

Total of 30 points possible.

Unformatted Attachment Preview

Name: Numbers 1 & 2 are worth 2 points each. 1. A _____________________________ budget is prepared before the period begins and is valid for only the planned level of activity. It should not be used for evaluating how well costs are controlled. Answer: 2. When a flexible budget is used in performance evaluation, actual costs are compared to: a) budgeted costs at budgeted activity levels. b) what the costs should have been for the actual level of activity. c) the static planning budget. d) what the costs should have been for the planned level of activity. Answer: 3. Short answer, worth 6 points. Tell as much as you know, based on the information we've learned in chapter 9. Feel free to add more rows to the answer box if you need more space. How would the shutting down of a business (due to, say, a global health crisis) impact the budgeting process for that business? s valid for only the planned ed. mpared to: formation we've learned in space. mpact the budgeting process #4. Complete parts a), b), and c). Total of 20 points possible. Inklings Tour Company of England gives tours of Oxford. Inklings provided the following cost information: Expense Wages and salaries Fuel Bus Rental Miscellaneous Expenses Tour bus maintenance Fixed Cost per Month Cost per ticket sold $ 500.00 $ 5.00 $ $ 1.00 $ 2,000.00 $ $ 600.00 $ 0.50 $ $ 2.00 (For example, wages and salaries cost $500 per month plus $5 per ticket sold.) The company expects to sell 1500 tickets in April at a price of $15 per ticket. a)Prepare the Inklings Tour Company planning budget for April. b) During April, the Company actually sold 1600 tickets. Prepare the company's flexible budget for Ap c) The actual results for April appear below. Prepare a report flexible budget performance report that shows the company's revenue and spending variances and activity variances for April. Actual # tickets sold 1,600 Revenue $ 23,500 Expenses: Wages and salaries Fuel Bus Rental Miscellaneous Expenses Tour bus maintenance Total expenses Net operating income 8,750 1,575 2,000 1,425 3,100 16,850 6,650 flexible budget for April. ...
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Final Answer

See the solution attached below

Name:

Numbers 1 & 2 are worth 2 points each.
1. A _____________________________ budget is prepared before the period begins and is valid for only the planned
level of activity. It should not be used for evaluating how well costs are controlled.
Answer: Static planning budget
2. When a flexible budget is used in performance evaluation, actual costs are compared to:
a) budgeted costs at budgeted activity levels.
b) what the costs should have been for the actual level of activity.
c) the static planning budget.
d) what the costs should have been for the planned level of activity.
Answer: B

3. Short answer, worth 6 points. Tell as much as you know, based on the information we've learned in
chapter 9. Feel free to add more rows to the answer box if you need more space.
How would the shutting down of a business (due to, say, a global health crisis) impact the budgeting process
for that business?
Shutting down a business will lead to ...

FrankRose23 (2498)
Rice University

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