Turn to Kool-Time€™s flexible budget in Exhibit 10-3.

1. Using the data from Exhibit 10-3, develop flexible budgets for four- and nine-pool levels of output.
2. Would Kool-Time€™s managers use the flexible budgets you developed in Requirement 1 for planning or for controlling? What specific insights can Kool-Time€™s managers gain from the flexible budgets you prepared in Requirement 1?

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KOOL-TIME POOLS Month Ended June 30 Flexible Budget Flexible Budget Output Units (Pools Installed) per Output Unit Sales revenue Variable expenses Fixed expenses Total expenses Operating income $60,00096,000 $132,000 88,000 20,000 60,00084,000 108,000 $ 0 12,000 24,000 $12,000 8,000 40,000 64,000 20,00020,000