Reference no: EM131832574

Question - Dog-Gone Haven is reviewing their budget for the current year. Currently, they are using a static budget to determine performance. The kennels have a capacity for 80 kennels, but Dog-Gone Haven budgeted to only use 60 kennels every day for the current year. They budgeted to have a price increase and charge customers $25/day. Dog-Gone Haven was able to bring in additional boarders, so that 65 boarding dogs stayed at the facility every day. The following is the information used to for the budget process.

Actual Budget

Variable Expenses

Feed & supplies 105,000 90,000

Veterinary fees 58,000 55,000

Training fees 6,000 5,500

Fixed Expenses

Depreciation & insurance 55,000 55,000

Utilities 10,000 12,000

Repairs & maintenance 11,000 12,000

Labor 85,000 93,000

a) Create the static budget

b) Create the flexible budget

c) How does your evaluation of the operating performance change after preparing the flexible budget?