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Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas: Grooming supplies (variable) y = $0 + $5x Direct

Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas: Grooming supplies (variable) y = $0 + $5x Direct labor (variable) y = $0 + $14x Overhead (mixed) y = $10,000 + $1x Milo, the owner, has determined that direct labor is the cost driver for all three categories of costs.

Explain why the flexible budget is more informative than the static budget.

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