Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 52

Static budget for a service company
A bank manager of City Savings Bank Inc. uses the managerial accounting system to track the costs of operating the various departments within the bank. The departments include Cash Management, Trust, Commercial Loans, Mortgage Loans, Operations, Credit Card, and Branch Services. The static budget and actual results for the Operations Department are as follows:

a. What information is provided by the budget Specifically, what questions can the bank manager ask of the Operations Department manager
b. What information does the static budget fail to Provide Specifically, could the budget information be presented differently to provide even more insight for the bank manager