Managerial Accounting Chapter 9 Exrcise 9-11

((Solotion with all details))

The revised flexible budget based on both client-visits and hours of operation can be used to create the performance report shown in Exhibit 9-11. The difference between this performance report and the one shown in Exhibit 9-8 is that the cost formulas Page 419 based on more than one cost driver are more accurate than the cost formulas based on just onc cost driver; hence, the variances will also be more nocurate. For example, the spending varianoe for electricity is $60 F when the flexible budget is based on one cost driver (sec Exhibit 9-8), but it is $90 F when computed using two cost drivers (see Exhibit'9-11). EXHIBIT 9-11 Performance Report With More Than One Cost Driver That combines Activity Variances with Revenue and Spending Variances The revised flexible budget based on both client-visits and hours of operation can be used to create the performance report shown in Exhibit 9-11. The difference between this performance report and the one shown in Exhibit 9-8 is that the cost formulas Page 419 based on more than one cost driver are more accurate than the cost formulas based on just onc cost driver; hence, the variances will also be more nocurate. For example, the spending varianoe for electricity is $60 F when the flexible budget is based on one cost driver (sec Exhibit 9-8), but it is $90 F when computed using two cost drivers (see Exhibit'9-11). EXHIBIT 9-11 Performance Report With More Than One Cost Driver That combines Activity Variances with Revenue and Spending Variances