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The owner of Babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. She does not understand why, when
The owner of Babycakes is interested in preparing a flexible budget rather than the static budget she currently uses. She does not understand why, when sales increase, her static budget often shows an unfavorable variance. Explain how a flexible budget will overcome this problem. Use the details of your newly prepared budget for the 4th quarter of 2016 (4500) to address her concern.
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