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You are now the Managerial Accountant for Krunchy Kreme, a s

You are now the Managerial Accountant for Krunchy Kreme, a specialty doughnuts chain that specializes in, you guessed it, Crunchy Doughnuts. You have the option of preparing a static or flexible budget for the year. In your first year, what type of budget would help the business the most, and why? After five years of being in business, would you continue to use the same budgeting style, and why?

After 10 years, you decide to use a Flexible Budget. What factors might you use to determine the sales volume and the various costs?

Solution Preview

For the first year, and preferably for the first few years of operation, you would want to prepare a flexible budget. Because we are dealing with a new business venture, many factors have to take a "wait-and-see" approach, including average number of weekly and monthly customers, which will determine a portion of the expenses, and other factors, ...

Solution Summary

You are now the Managerial Accountant for Krunchy Kreme, a specialty doughnuts chain that specializes in, you guessed it, Crunchy Doughnuts. You have the option of preparing a static or flexible budget for the year. In your first year, what type of budget would help the business the most, and why? After five years of being in business, would you continue to use the same budgeting style, and why?

After 10 years, you decide to use a Flexible Budget. What factors might you use to determine the sales volume and the various costs

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