A Flexible Budget Has Which of the Following Characteristics

By Ra_Siena77 10 May, 2022 Post a Comment

A flexible budget is a budget that adjusts or flexes with changes in volume or activity. Hence the actual performance can be compared with the budget.

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The static budget amounts do not change.

. It helps the management to decide the level of output to be produced in order to generate profits for the business based on budgeted cost at different activity levels and budgeted sales. - Often based on several levels of activity - Useful for evaluating past performance - useful to compare different scenatios 374400-35000 units x 1hr x 10hr24400 u 374400-35000024400 u. -used for planning materials labor and overhead requirements.

More accurate budget is prepared by this way. Allows for modification during the budgeted period. It includes budgeted selling price and variable cost in calculation of budget for the actual level of activity.

A flexible budget performance report indicates a sales variance of 200 unfavorable the variance was caused by. A flexible budget adjusts to changes in actual revenue levels. The variance was caused by 73.

This example has the following details provided by a factory expected to operate at 70 level of activity ie 14000 hrs-. Check all that apply. A flexible budget flexes the static budget for each anticipated level of production.

Standard costs have which characteristics. The flexible budget covers a range of activities A flexible budget is easy to change according to variations of production and sales levels. All of the following individuals work to help set standard costs.

A flexible budget adjusts the budget amounts for different levels of activity. A flexible budget is one based on different volumes of sales. Budget reports are commonly prepared for.

A flexible budget has which of the following characteristics. A budget is a mechanism for planning all of the operations or activities of a company. Choice A is correct.

The flexible budget identifies volume components of variances from planned activityChoice c is incorrect. The following overhead costs appear on the flexible budget at the 200000 hour level of activity. Actual sales were 55000.

Can be utilized by several product divisions. The reason for the variance 69. If a manufacturing company has a total controllable variance of 500 F then 77.

Used in preparing flexible budgets. It is an operational and resource plan for the company. Selling units for less than the budgeted price.

A flexible budget is a budget that shows differing levels of revenue and expense based on the amount of sales activity that actually occurs. The steps needed to construct a flexible budget are. 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.

A flexible budget has which of the following characteristics. It is a dynamic budget which adjusts to the actual level of activity. Isolates the impact of variable costs on the overall budget.

The flexible budget is more sophisticated and useful than a static budget. A carefully predetermined cost. This flexibility allows management to estimate what the budgeted numbers would look like at various levels of sales.

A rolling budget on the other hand adjusts automatically as actual revenue and expenses change from. Use the following to answer questions 1-2. -can be used in a flexible budgeting system to enable management to better understand the reasons variances.

Characteristics of Flexible Budget - may be prepared for any activity level in the relevant range - show costs that should have been incurred at the actual level of activity enabling apples to apples cost comparisons - help managers control costs - improve performance evaluations. There are two types of Flexible Budgets. With a static budget the company sets a specific budget amount for each period regardless of how much revenue or expenses actually vary from month to month.

Which of the following is a characteristic of a flexible budget. The fixed budget indicates sales of 50000. The primary feature of flexible budgets is their ability to adjust to actual volume.

A fixed budget performance report indicates a sales variance of 20000 favorable. Provides budgeted numbers for various activity levels. It helps to overcome the constraints of fixed budget which is prepared for a single expected level of activity.

The important characteristics of a flexible budget can be pointed as follows. They remain unchanged from the amounts established at the time that the static budget was prepared and approved. -preset costs for delivering a product or service under normal conditions.

Flexible budget facilitates performance measurement and evaluation. Used in preparing fixed budgets. It helps in variance analysis after.

What are the types of Flexible Budgets. A flexible budget performance report indicates a sales variance of 200 unfavorable. The following are the characteristics of flexible budgets.

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. The flexible budget can be used for the determination of budgeted sales costs and profits at different activity levels. Pollitt Potato Packers has a flexible budget for manufacturing overhead that is based on direct labor hours.

Advantages of flexible budgeting. A flexible budget is a variation of a static account for the actual level of activity. 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.

Variable overhead costs total. Expected level of performance. It is widely used by companies for performance budgeting.

The following are the advantages of flexible budgeting. Match the cost variance component to its definition. Example of Flexible Budgets.

Because it is prepared to show the expected cost and revenue for various levels of activities a flexible budget can cover a wide range of activities. The important characteristics of flexible budget can be pointed as follows. The important characteristics of the flexible budget can be pointed as follows.

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. The budget is then compared to actual expenses for control purposes. A flexible budget is prepared for different range of activity.

Based on past experiences and data.

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