Budgeting and Cost Allocation at Google

• Values:
  • Budgeted Revenue: $50,000,000
  • Budgeted Expenses: $40,000,000
  • Actual Revenue: $45,000,000
  • Actual Expenses: $38,000,000
• Requirements:

1. Prepare a flexible budget for Google.
2. Calculate the revenue and expense variances.
3. Discuss the advantages of flexible budgeting over static budgeting.
4. Allocate costs to different departments based on budgeted and actual revenues.