Read Case 9-26 “Performance Report With More Than One Cost Driver,” located in Chapter 9 of the textbook. Use Exhibit 9-11 as a model. Consider the characteristics of a flexible budget and how it might minimize the deficiencies of the master (static) budget.
Using Exhibit 9-11 as your guide, prepare a flexible budget performance report for the year that shows both spending variances and activity variances.
If you were on the board of directors of the theater, would you be pleased with how well costs were controlled during the year? Why, or why not?
The cost formulas provide figures for the average cost per production and average cost per performance. How accurate do you think these figures would be for predicting the cost of a new production or of an additional performance of a particular production?
Part 2: Reflecting on the Case
Reflect on what you learned in Part 1 and respond to the following questions.
Describe how the budgeting and accounting processes within an organization support ethical financial planning and decision-making.
When reporting financial data, what steps do you take to demonstrate ethical behavior to ensure the integrity of data collection, analysis, and reporting?
Include a Biblical principle related to budgeting or ethical decision-making to foster dignity and promote moral values.
General Requirements
Include at least two scholarly sources in addition to your textbook.
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