Flexible Budget

In an attempt to improve budgeting, the controller for Engersol, Inc., has developed a flexible budget for overhead costs. Engersol,

Inc., makes two types of products, commercial floor cleaners and household floor cleaners. The company expects to produce $300,000$

units of the commercial cleaner and $150,000$ units of the household cleaner during the coming year. The commercial cleaner requires

$0\mathrm{.}05$ direct labor hour per unit, and the household cleaner requires $0\mathrm{.}08.$ The controller has developed the following cost formulas for

each of the four overhead items:

Prepare an overhead budget that reflects production that is $10$ percent higher than expected $($for both products$).$

Prepare an overhead budget for production that is $20$ percent lower than expected.

Which of the four data analytic types$-$descriptive, diagnostic, predictive, or prescriptive$-$is being used in creating the three flexible

budgets? $($See Exhibits $2\mathrm{.}5$ and $2\mathrm{.}6,$ pp$.37,40,$ for a review of data analytic types.$)$