Bellaire Clinical Labs, Inc. (B)

Abstract

This case exposes students to (1) basic assumptions in the creation of an operating plan; (2) analyzing the difference between actual and planned financial results, including the development of flexible expense budgets, quantifying the profit impact of various business risks that impact profit, and preparing a comprehensive reconciliation of actual and planned profits; and (3) thinking through some basic issues associated with performance evaluation of the functional manager. It may be used as a stand-alone case on flexible budgeting, or it may be paired with the A case (UVA-C-2178) in a module on budgeting and strategic-profitability analysis or flexible expense budgeting.

Keywords: budgeting, performance measurement, profitability analysis, strategy formulation, management control systems