Question
Question 1: Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (32 points) Show the static budget for January in Contribution
Question 1: Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (32 points)
-
Show the static budget for January in Contribution Margin Income Statement format be sure to list out each expense line.
-
Compare Januarys static budget to Januarys actual results. Specify which line items are favorable or unfavorable and how much. Provide potential explanations for each of the variable costs. Note: Saying that an item was above or below budget is NOT an explanation. You need to include potential (made-up) reasons.
-
Show the static budget for February in Contribution Margin Income Statement format be sure to list out each expense line.
-
Compare Februarys static budget to Februarys actual results. Specify which line items are favorable or unfavorable and how much. Provide potential explanations for each of the variable costs. Note: Saying that an item was above or below budget is NOT an explanation. You need to include potential (made-up) reasons.
Question 2: Prepare a flexible budget in Excel for Vroom-Vroom. (32 points)
-
Show the flexible budget for January in Contribution Margin Income Statement format be sure to list out each expense line.
-
Compare Januarys flexible budget to Januarys actual results. Specify which line items are favorable or unfavorable and how much. Provide potential explanations for each of the variable costs. Note: Saying that an item was above or below budget is NOT an explanation. You need to include potential (made-up) reasons.
-
Show the flexible budget for February in Contribution Margin Income Statement format be sure to list out each expense line.
-
Compare Februarys flexible budget to Februarys actual results. Specify which line items are favorable or unfavorable and how much. Provide potential explanations for each of the variable costs. Note: Saying that an item was above or below budget is NOT an explanation. You need to include potential (made-up) reasons.
Question 3: Analyze the differences between static and flexible budgets. (34 points)
-
What is the difference between static and flexible budgets in theory?
-
What are the differences between the static and flexible budgets for Vroom-Vroom? What variances are different and by how much? What does this tell us?
-
What are the pros and cons for each - static and flexible budgets?
-
Write a letter to Vroom-Vrooms CFO. Explain the results in January and February. Provide your recommendation for either static or flexible budgets. Provide explanations and backup for your recommendation. Note: A letter to the CFO should have correct spelling and grammar, and is expected to be approximately 400 words. Thorough explanations with backup are required.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started