What amounts appear on the flexible budget report?

What budgeted amounts appear on the flexible budget report? … Original budgeted amounts at the static budget activity level.

What is the flexible budget amount?

A flexible budget is a budget that shows differing levels of revenue and expense, based on the amount of sales activity that actually occurs.

What is a flexible budget based on?

A flexible budget adjusts based on changes in actual revenue or other activities. The result is a budget that is fairly closely aligned with actual results. This approach varies from the more common static budget, which contains nothing but fixed expense amounts that do not vary with actual revenue levels.

How do you calculate flexible budget?

Dividing total cost of each category by the budgeted production level results in variable cost per unit of $0.50 for indirect materials, $0.40 for indirect labor, and $0.40 for utilities. To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume.

What is the flexible budget amount quizlet?

A flexible budget is a budget developed using the same standards that were used to created the static budget but based on actual production. It is essentially the budget that would have been developed had the actual sales and production output been known. Describe the flexible budget revenues.

How are flexible budgets prepared?

Preparation of a Flexible Budget. The flexible budget uses the same selling price and cost assumptions as the original budget. Variable and fixed costs do not change categories. The variable amounts are recalculated using the actual level of activity, which in the case of the income statement is sales units.

How do you calculate flexible budget in Excel?

How do you calculate flexible budget variance?

What do you mean by flexible budget discuss its importance?

Flexible, rolling budgets empower entrepreneurs to cope with change. This nimble planning process lets you adjust spending throughout the year; benefits include less overspending, more opportunities and speedier responses to changing market and business conditions.

What is flexible budget example?

This type of budget is most often based on changes in a company’s actual revenue and uses percentages of revenue rather than static numbers. For example, a flexible budget may allot 25% of a company’s revenue to salary as opposed to allotting $100,000 to salary in a given year.

What is a flexible budget Mcq?

A budget that will be changed at the end of every month in order to reflect the actual costs of a department.

What is flexible budget variance?

What is a Flexible Budget Variance? A flexible budget variance is a calculated difference between the planned budget and the actual results. In the example above, the company has set a target of 85% production capacity. The budgeted or planned sales volume of 212,500 units yields a $740,625 profit.

What are three types of flexible expenses?

Flexible expense examples include groceries, dining out, entertainment, and even utilities.

What are the three types of flexible budget variances?

Favorable variances arise when actual results exceed budgeted. Unfavorable variances arise when actual results fall below budgeted. Favorable profit variances arise when actual profits exceed budgeted profits. Unfavorable profit variance occurs when actual profit falls below budgeted profit.

What is static budget and flexible budget?

Static Budget – the budget is prepared for only one level of production volume. Also called a Master budget. Flexible Budget – a summarized budget that can easily be computed for several different production volume levels. Separates variable costs from fixed costs.

Is the difference between a flexible budget amount and the corresponding static budget amount?

Solution(By Examveda Team)

Difference between flexible budget amount and corresponding static budget amount is classified as sales volume variance. The sales volume variance is the difference between the actual and expected number of units sold, multiplied by the budgeted price per unit.

What are the two variances that make up a flexible budget variance?

First, a flexible budget is a budget in which some amounts will increase or decrease when the level of activity changes. A flexible budget variance is the difference between 1) an actual amount, and 2) the amount allowed by the flexible budget.

What causes the difference between static and flexible budget amounts?

The main difference between Static and Flexible budgets lies in its nature of adaptability. A static budget once formulated cannot be changed irrespective of changes occurring in its assumed activity before the fixed period is over. … A flexible budget on the other hand does not pre-determine the money flow of a period.

How do flexible budgets differ from static budgets quizlet?

A static budget is based on the level of output planned at the start of the budget period. The static-budget variance is the difference between the actual result and the corresponding budgeted amount in the static budget. … A flexible budget is adjusted (flexed) to recognize the actual output level of the budget period.

How do you calculate static budget?

To calculate a static budget variance, simply subtract the actual spend from the planned budget for each line item over the given time period. Divide by the original budget to calculate the percentage variance.

What is characteristic of an after the fact flexible budget?

An after-the-fact flexible budget allows managers to generate financial results from number of potential scenarios. (An after-the-fact flexible budget is used to compute what costs should have been for the actual level of activity.) A static budget compares actual cost with budgeted costs.

What is the advantage of using a flexible budget?

Why make a flexible budget? The biggest advantage to a flexible budget is that it more accurately reflects the state of your finances. The alternative, static budgeting, can’t account for unexpected expenses or changing income. A flexible budget will help you track where you can adjust spending each month.

Why flexible budget is better than fixed budget?

The greatest advantage that a flexible budget has over a static budget is its adaptability. In the real world, change is real and it is constant. A flexible budget can handle that reality and better position a company for the challenges of the marketplace. Fixed versus variable expenses in a flexible and static budget.

How does a flexible budget relate to a master budget?

The key difference between master budget and flexible budget is that master budget is a financial forecast that contains all budgeted revenues and costs for the upcoming accounting year whereas flexible budget is a budget that is adjusted by incorporating the changes in the number of units produced.