Question.5129 - EC DB #3 (Extra Credit/Budget/Performance)(10 points Extra Credit Due Saturday, 5/3/2025 at 11:00 pm)First 5 points for your own answer to this forum topic. The other 5 points is for your reply to at least one student's posting. You will not see other students' answers until you post yours. Once you post your answer, then you will see others' answers which you can reply to.Describe an example of how an unfavorable variance between actual and budget amounts in a fixed static (master) budget can become a favorable variance in a flexible budget report.Also, since flexible budget is more accurate in measuring performance, can company just develop flexible budget without the static budget? Why or why not?
Answer Below:
Imagine x company xxxxxxx in xxxxx revenue xx its xxxxxx master xxxxxx based xx a xxxxxxxx of xxxxxxx units xx each xxxxxxx the xxxxxx sales xxxx out xx be xxxxx at xxxx totaling xx actual xxxxxxx This xxxxx appear xx an xxxxxxxxxxx variance xx actual xx expected xxxx units xx if xxxxxxxxx it xx the xxxxxx budget xxxxxxx the xxxxxxx selling xxxxx dropped xxxxxxx in x flexible xxxxxx which xxxxxxx the xxxxxxxx figures xxxxx on xxx actual xxxxx of xxxxxxxx units xxx budgeted xxxxxxx would xx Now xxxxxxxxx the xxxxxx to xxx flexible xxxxxx of xxxxx only x unfavorable xxxxxxxx and xx the xxxxxx variable xxxxx were xxxxx than xxxxxxxx the xxxxxxx net xxxxxxxxx income xxxxxxxx could xxxx be xxxxxxxxx This xxxxx happens xxxxxxx the xxxxxx budget xxxxx t xxxxxxx for xxxxxx changes xxxxx the xxxxxxxx budget xxxx providing x more xxxxxxxxx performance xxxxxxxxxx Should x Company xxxx Use x Flexible xxxxxx While xxx flexible xxxxxx is xxxxxx for xxxxxxxxxxx evaluation xxxxxxxxx should xxx eliminate xxx static xxxxxx because xxxxxxxx and xxxxxxxxxxxx The xxxxxx budget xxxx expectations xxx targets xxx the xxxx useful xxx strategic xxxxxxxx and xxxxxxxx allocation xxxxxxxxxxxxxx It xxxxxxxx a xxxxxxxx to xxxxxxx actual xxxxxxx against xxxx was xxxxxxxxx planned xxxxxxxxxx of xxxxxx changes xxxxxxxx Making xxxxxxxxxx and xxxxxx often xxx the xxxxxx budget xx approve xxxxxxxx set xxxxxxxxxx and xxxxxx financial xxxxx In xxxxx both xxxxxxx serve xxxxxxxxx purposes xxxxxx budget xx for xxxxxxxx and xxxxxxx Flexible xxxxxx is xxx evaluating xxxxxxxxxxx performanceMore Articles From Business CC 1B Sec EN 1
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