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Summarize the results of the      flexible budget variances computations based on the comparison between the      flexible budget and the actual results.

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Read the scenario located in “Problems – Series A,” section 8-19A of Ch. 8, “Performance Evaluation,“ of Fundamentals of Managerial Accounting Concepts. This scenario puts you in charge of preparing a budget for the Redmond Management Association annual public relations luncheon.

Continue to the Prepare a Flexible Budget tab.

Flexible Budget

Use Excel® – showing all work and formulas – to complete the following:

  • Prepare a flexible budget
  • Compute the sales volume      variance and the variable cost volume variances based on a comparison      between the master budget and the flexible budget.
  • Compute flexible budget      variances by comparing the flexible budget with the actual results.

Continue to the Presentation tab.

Mr. Snow was extremely upset with the budget deficit. He immediately called you, the treasurer, to complain about the budget variance for the meal cost. He told you that the added dessert caused the meal cost to be $4,810 ($25,110 – $20,300) over budget. He added, “I could expect a couple hundred dollars one way or the other, but several thousand is totally unacceptable. At the next budget meeting of the budget committee, I want you to explain what happened.”

Create a 6- to 8-slide presentation for the budget committee meeting showing your findings and recommendations from your computations. 

Complete the following in your presentation:

  • Summarize the results of the      sales volume and variable cost volume variances computations based on the      comparison between the master budget and the flexible budget.
  • Summarize the results of the      flexible budget variances computations based on the comparison between the      flexible budget and the actual results.
  • Justify the favorable or      unfavorable budget variances.
  • Since this is a not-for-profit      organization, address why anyone should be concerned with meeting the      budget.
  • Make recommendations for what      can be done differently to stay on budget for future luncheons. 

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