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Practice Problem 1 . Laboratory Services at Eastgate Hospital Static Budget Before the period started, Eastgate expected the laboratory to perform 1 3 , 0

Practice Problem 1. Laboratory Services at Eastgate Hospital
Static Budget
Before the period started, Eastgate expected the laboratory to perform
13,000 tests
Compute the static budget for the lab at the expected level of activity
Static Budget Variances|
The laboratory actually performed 14,800 tests
Find the static budget variances by comparing the static budget to the
actual costs
What is wrong with this analysis?
Flexible Budget Variances
Compute a flexible budget at the actual level of activity
Find the flexible budget variances by comparing the flexible budget to the
actual costs
Why is this analysis more useful?
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