Part 1: Addressing the Key Questions From the Case
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.