A Flexible Budget Has Which of the Following Characteristics

Has set the following standards for one unit of product. Example of Flexible Budgets.

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It is the cost where the company should develop at the starting of the year with respect to the price paid and the amount that should be used.

. Definition of a Flexible Budget A flexible budget is a budget that adjusts or flexes with changes in volume or activity. A flexible budget performance report indicates a sales variance of 200 unfavorable the variance was caused by. The analysis of these definitions shows that budget is.

If a manufacturing company has a total controllable variance of 500 F then 77. Iii always framed for a well-defined future period of time. A flexible budget is usually designed to predict effects of changes in volume and how that affects revenues and expenses.

And iv prepared to achieve certain objectives. - It is expressed in quantitative or monetary terms. Fixed costs will be constant within relevant range of operations where the variable costs will continue.

Expected level of performance. Provides budgeted numbers for various activity levels. This example has the following details provided by a factory expected to operate at 70 level of activity ie 14000 hrs-.

Arens Corporation has developed the following flexible budget formula for annual indirect labor costs. A fixed budget performance report indicates a sales variance of 20000 favorable. A flexible budget adjusts to changes in actual revenue levels.

The primary difference between a fixed static budget and a variable flexible budget is that a fixed budget. Selling units for less than the budgeted price. One that can be changed whenever a manager so desires.

The budget is then compared to actual expenses for control purposes. A flexible budget performance report indicates a sales variance of 200 unfavorable. More accurate budget is prepared by this way.

The variance was caused by 73. The steps needed to construct a flexible budget are. A flexible budget is prepared for different range of activity.

Used in preparing fixed budgets. - It spells out the objects and the policies to be pursued in order to achieve the objective of the organisation. It includes budgeted selling price and variable cost in calculation of budget for the actual level of activity It is a dynamic budget which adjusts to the actual level of activity.

The master budget and all the budgets included in the master budget are examples of static budgets. Often based on several levels of activity. Cannot be changed after the period begins.

A flexible budget is a variation of a static account for the actual level of activity. Advantages of flexible budgeting. Hence the actual performance can be compared with the budget.

Following are the characteristics of a good budget. I a statement of estimated or expected results. What are Standard costs.

Actual results are compared to the static budget numbers as one means to evaluate company performance. - It is prepared for a fixed period of time It is prepared before the period in which it commences. Based on past experiences and data.

While a variable budget can be changed after the period begins B. Is a plan for a single level of sales or other measure of activity. Ii stated in quantitative physical or financial terms.

The reason for the variance 69. A flexible budget has which of the following characteristics. The static budget amounts do not change.

Allows for modification during the budgeted period. 05 pounds 100 per pound. -can be used in a flexible budgeting system to enable management to better understand the reasons variances.

The important characteristics of flexible budget can be pointed as follows. 2useful to compare different scenarios. 3useful for evaluating past performance The layout for the flexible budget follows a _________ format.

The following are the advantages of flexible budgeting. Now between 85 and 95 of activity level its semi-variable expenses increase by 10 and above 95 of activity level they grow by 20. A carefully predetermined cost.

1 hour 1000 per hour. -preset costs for delivering a product or service under normal conditions. The important characteristics of the flexible budget can be pointed as follows.

-used for planning materials labor and overhead requirements. Can be utilized by several product divisions. Used in preparing flexible budgets.

The same as a continuous budget. - Practical to implement. A static budget is one that is prepared based on a single level of output for a given period.

Total Cost P480000 P5 per machine hour Operating budgets for the current month are based upon 20000 machine hours of planned machine time. They remain unchanged from the amounts established at. Flexible budget usually has the following characteristics.

A flexible budget is. Wide Range Flexible budget covers a range of activities because it is prepared to show the expected cost and revenue for different levels of activities. Typically actual revenues or actual units sold are inserted into a flexible budget model and budgeted expense levels are automatically generated by the model based on formulas that are set at a percentage of sales.

Actual revenues or other activity measures are entered into the flexible budget once an accounting period has been completed and it generates a budget that is specific to the inputs. It is the amount that should be paid for the. The following are the characteristics of flexible budgets.

One that uses the formula total cost cost per unit x units produced. While a variable budget. - Often based on several levels of activity - Useful for evaluating past performance - useful to compare different scenatios ABC Co.

Standard costs have which characteristics. A flexible budget is a budget that shows differing levels of revenue and expense based on the amount of sales activity that actually occurs. Isolates the impact of variable costs on the overall budget.

Which of the following is a characteristic of a flexible budget. The flexible budget is more sophisticated and useful than a static budget. The standard cost contains the features that are included it depend upon the past experience it is used for preparing the flexible budgets and fixed budgets.

It helps to overcome the constraints of fixed budget which is prepared for a single expected level of activity. Static versus Flexible Budgets. In order to accurately predict the changes in costs management has to identify the fixed costs and the variable costs.

Adjusted to reflect expected costs at the actual level of activity. The flexible budget covers a range of activities A flexible budget is easy to change according to variations of production and sales levels.

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