Flexible Budget Based on More than One Cost Driver
This revised flexible budget based on both client-visits and hours of operation can be used exactly like we used the earlier flexible budget based on just client-visits to compute activity variances as in Exhibit 9–5 , revenue and spending variances as in Exhibit 9–6 , and a performance report as in Exhibit 9–7 . The difference is that because the cost formulas based on more than one cost driver are more accurate than the cost formulas based on just one cost driver, the variances will also be more accurate.