please answer part E. using information from parts A B C D.

part E.

Objective 1-Prepare flewibfe badieta Objective 2 L Leam to explain the activiry and revenue/spendins variancer Lama iasaseratce Larry's tarwn Service provides tawo care in s planned community where ail fawns are acprosimately the saine she. At the end of May. Larry prepared his June budget based en nowing 500 iswns. Since all of the tawns are simblir in uize. tarry felt that the number of lawns mowed in a month would be the best way to messure overall activity for Nas business. vi. Guestions 1. What are faed expenies? What are vartable expenes? office rent, untilites. Workible: Cos,'suppics, mourferienae. 2. What is the planned net income? What is the actual income? Pikunnes is 5,0p0 ficfeal. H6,FSO 3. Why is there a difference? Gat: wert jo DS. To knowia F F Favorable variance that occurs when actual revenue is greater than budgeted revenue Oh wiben actual costs are less than budgeted costs. U= Unfavorable variance that occurs when actual costs are greater than budgeted costs: Qurifiods Dustives wist Ganties n. fiex.her. Flictrarge 25t th 930 lex:ble ve. Mefual. Reverive is Ced formeth inwiges So. what is the actuar poce being charped to mser a lawn? So, what a the acoual gaiof ref cout thindwa leanl. The main difference between (2) and (1): the 50 lawns difference (activity) The main difference between (4) and (2): the cost rate obtained - whethec the manoger is able to reduce it and manage the cost rates well Total of ACTIVITY, ALVENUE and SPENONG variances: (3)+(5) - doesn't mesn a lot because we don't know whether it is due to activity difference or cost rate difference Characteristics of Flexible Budgets 1. May be prepared for any activity level in the relevant range. 2. Shaw costs that should have been incurred at the actual level of activity, enabing "apples to apples" cost comparison. 3. Help managees control costh. 4. Imgrove performance evaluation. Deficiencies of the Static Planning Budget We cannot answer this question because the actual level of activity is different from the pianned level of activity. Therefore, actual variable costs are ilely to be higher than planned variable costs regardiess of Larry/s managerial efficlency