Professional Documents
Culture Documents
Flexible Budgets and Performance Analysis: Managerial Accounting
Flexible Budgets and Performance Analysis: Managerial Accounting
Managerial Accounting
Seventeenth edition
9-2
Larry’s Budget
9-5
Performance Evaluation
The relevant question is . . .
“How much of the cost variances are due to
higher activity and how much are due to cost
control?”
Activity Variances
Planning Flexible
budget revenues budget revenues
and expenses and expenses
Activity Variances
Larry’s Flexible Budget Compared with the Planning Budget
9-15
Activity Variances
Larry’s Flexible Budget Compared with the Planning Budget
Activity and revenue increase by 10 percent, but net operating income
increases by more than 10 percent due to the presence of fixed costs.
9-16
Universities
9-23
End of Chapter 9