Global Dental Equipment: How Variance Analysis Can Help a Startup Business Survive Growing Pains

This educational case study describes an entrepreneurial crisis at Global Dental Equipment (GDE), a company selling used dental equipment. GDE had grown from a startup and reached a volume of activity such that the founder was no longer able to personally manage all of the dayto- day aspects of the business. The evolution of GDE from startup to rapid growth to bringing in outside investors and a Board of Directors is described. During its early years, GDE’s accounting system supported historical reporting, compliance, and taxation requirements. However, GDE reached a point where it needed to use more detailed and relevant management accounting information to continue growing and transition through the entrepreneurial crisis. Such information can be provided by budgets and the variance analysis of actual results against budget. This case study is designed for undergraduate students undertaking their second course in cost/management accounting and/or graduate management accounting students.