Dog-Gone Haven is reviewing their budget for the current year. Currently, they are using a static budget to determine performance. The kennels have a capacity for 80 kennels, but Dog-Gone Haven budgeted to only use 60 kennels every day for the current year. They budgeted to have a price increase and charge customers $25/day. Dog-Gone Haven was able to bring in additional boarders, so that 65 boarding dogs stayed at the facility every day. The following is the information used to for the budget process.

                                     Actual      Budget

Variable Expenses

Feed & supplies         105,000     90,000  

Veterinary fees             58,000     55,000  

Training fees                   6,000       5,500

      

Fixed Expenses

Depreciation & insurance  55,000   55,000

Utilities                            10,000     12,000  

Repairs & maintenance    11,000   12,000  

Labor                                85,000    93,000      

 

 

a) Create the static budget

b) Create the flexible budget

c) How does your evaluation of the operating performance change after preparing the flexible  budget?

Answer rating: 100% (QA)

a b The static budget and flexible budget and the variance anlysis is calculated in tabular form bel... View the full answer