Budgeting helps organize and formalize managements planning activities. This unit extends the study of budgeting to look more closely at the use of budgets to evaluate performance. Evaluations are important for controlling and monitoring business activities. This unit also describes and illustrates the use of standard costs and variance analyses. These managerial tools are useful for both evaluating and controlling organizations and for the planning of future activities. Based on the reviews of the Budgets: Operations, Flexible, and Cash Flows Budgets, respond to 3 of the following discussion questions. You are encouraged to research outside sources and, of course, cite them. Do not, however, quote sources word-for-word, but rather, respond to the Discussion Forum Question in your own words.

1. What limits the usefulness to managers of fixed budget performance reports?

2. Identify the main purpose of a flexible budget for managers.

3. What type of analysis does a flexible budget performance report help management perform?

4. In what sense can a variable cost be considered constant?

5. What department is usually responsible for a direct labor rate variance? What department is usually responsible for a direct labor efficiency variance? Explain

. 6. What is a price variance? What is a quantity variance?

7. What is the purpose of using standard costs?

8. give references for your answer.

After youve completed the questions above, please provide a brief explanation of how this information is important in managerial decision making.