Question: New York Fashions owns 87 women’s clothing stores in shopping malls. Corporate headquarters of New York Fashions uses flexible budgets to control the operations of each of the stores. The following table presents the August flexible budget for the New York Fashions store located in the Crystal Lakes Mall:

.:.

Variable costs are based on a percentage of revenues.

Required:

1. Revenues for August were $ 80,000. Calculate budgeted profits for August.
2. Actual results for August are summarized in the following table:
   
   Prepare a report for the New York Fashions— Crystal Lakes Mall store for the month of August comparing actual results to the budget.
3. Analyze the performance of the Crystal Lakes Mall store in August.
4. How does a flexible budget change the incentives of managers held responsible for meeting the flexible budget as compared to the incentives created by meeting a static (fixed) budget?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document