For the year GEM Associates projected
that it would generate $2,000,000 of revenues; it actually generated $1,800,000.?The company has consulted with you for help in understanding what is happening.?You decide to address the following items.
a)????What are the major weaknesses in the report above? (2 marks)
b)???Recast the report (using a flexible budget instead of the static one presented) to enable a more meaningful way to enable cost control evaluation. (4 marks)
c)????GEM Associates uses a management by exception philosophy.?Use the report you prepared in (b) above and explain which costs are likely to receive additional investigation. (2 marks)
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