FINANCIAL AND MANAGERIAL ACCOUNTING
FINANCIAL AND MANAGERIAL ACCOUNTING
9th Edition
ISBN: 9781264899180
Author: Wild
Publisher: MCG
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 21, Problem 1QS
To determine

Flexible Budget:

A flexible budget is the budget which is prone to changes as per the requirement of allocation of funds according to the volume of transactions over a period of time. The variable cost is an integral regulator of a flexible budget, because the fixed costs are always stagnant irrespective of the operations undergone by the business. Therefore, the variable costs undergo change with the dynamics of the operations of business.

Flexible Budget Performance Report:

A flexible budget performance report is the analysis of deviations between the budget forecasted and the outcome of such budget. This report helps the end users to locate the remarkable deviations from the ones which were budgeted so as to fix them at the earliest.

To prepare: Flexible budget performance report.

Expert Solution & Answer
Check Mark

Explanation of Solution

B Company

Budgeted Performance Report

For the month ended May 31, 20XX

Particulars

Flexible Budget

($)

Actual Budget

($)

Net Variance

($)

Sales(105,000 units)

1,300,000

1,275,000

25000

Variable costs

750,000

712,500

37500

Contribution

550000

562,500

12500

Fixed costs

300,000

300,000

-

Net Income

250,000

262500

12500

Hence, the net income of the firm is increased by 12500 from the projected budget.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY