The case has two parts.
Part I.
We have learned about the basic ideas of managerial accounting during the first two modules. Let's try to apply this knowledge and review a sample budget for a charter school (https://www.uscharterschools.org/pub/uscs_docs/r/sample/budget.htm).
The first requirement of this case relates to the planning function of a budget. Comment on the following relating to the budget.
Is this a static or flexible budget?
What are reimbursements and expenses per student?
Which are the highest expense categories?
Do all expenses seem necessary?
Is this school viable? How many students does the school need to break even (show your analysis and state your assumptions for break-even)?
What are the general benefits of preparing this budget?
Discuss how this budget is likely to be used.
Part II.
Use the background material and Internet to answer the following questions.
The second requirement of this case relates to the control function of a budget.
Variance analysis is a traditional tool used for planning and control. Comment on advantages and disadvantages of using this approach for performance evaluations.
Do you have any suggestions for complementary or alternative performance measures?