Description
The purpose of this assignment is to evaluate a static budget and prepare and evaluate a flexible budget. You are required to calculate and analyze variances and discuss how variances are critical to managerial decision making.
Instructions:
1. Download the Excel file posted to the week 6 projects thread.
2. Review the static budget.
3. Prepare a flexible budget.
4. Complete the explanations tab via answering the questions incorporated therein.
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Explanation & Answer
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Midwest Veterinary Clinic & Hotel
The static budget was based on the following.
Total number of boarding days
Average animal fee/day
Annual unit sales
Actual
365
27.5
3200
Static
Budget
365
33
4000
5.25
4.25
3.50
0.85
3.00
4.00
2.00
1.00
Variable cost per animal per day
Feed
Veterinary Fees
Labor
Supplies
800
Fixed Costs - See Static Budget Tab
Flexible Budget Tab requirements
1. Prepare a flexible budet and variance analysis based on the data provided.
If applicable, list assumptions via row 38.
Questions Tab requirements
1. Answer the questions incorporated therein.
Midwest Veterinary Clinic & Hotel
Flexible Budget
Actual
Flexible
Budget
Sales
88,000.00
88,000.00
Less: Variable Expenses
Feed
Veterinary Fees
Labor
Supplies
16,800.00
13,600.00
11,200.00
2,...