MANAGERIAL ACCOUNTING IN ACTION
The Issue
· Victoria: How is the budgeting going?
· Rick: Pretty well. I didn’t have any trouble putting together the budget for March. I also prepared a report comparing the actual results for March to the budget, but that report isn’t giving me what I really want to know.
· Victoria: Because your actual level of activity didn’t match your budgeted activity?
· Rick: Right. I know the level of activity shouldn’t affect my fixed costs, but we had more client-visits than I had expected and that had to affect my other costs.
· Victoria: So you want to know whether the higher actual costs are justified by the higher level of activity?
· Rick: Precisely.
· Victoria: If you leave your reports and data with me, I can work on it later today, and by tomorrow I’ll have a report to show you.