Asked by Aliya leblanc on May 12, 2024
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Difabio Tech is a for-profit vocational school. The school bases its budgets on two measures of activity (i.e., cost drivers), namely student and course. The school uses the following data in its budgeting:
In June, the school budgeted for 1,070 students and 90 courses. The actual activity for the month was 1,370 students and 95 courses.Required:Prepare the school's flexible budget for the actual level of activity in June.
Cost Drivers
Factors that cause a change in the cost of an activity, used to assign overhead costs in activity-based costing systems.
Vocational School
An educational institution that provides specialized training and education targeted toward particular careers or trades.
Flexible Budget
A flexible budget adjusts expenses based on changes in actual revenue or other activity levels, allowing for more accurate financial planning.
- Develop adaptive budgets corresponding to real activity rates.
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Learning Objectives
- Develop adaptive budgets corresponding to real activity rates.
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