Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes. To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

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Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

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Students have asked these similar questions

What assumption is implicitly made about cost behavior when a budget is directly compared toactual results? Why is this assumption questionable?

What assumption is implicitly made about cost behavior when actual results are directly compared to a static planning budget? Why is this assumption questionable?

What limits the usefulness to managers of fixed budget performance reports?

Answer 2

Question

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

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Answer 3

Question

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

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Answer 4

Question

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

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Answer 5

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

Answer 6

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

Answer 7

Chapter 9, Problem 9Q

To determine

Introduction:

Static planning budget forecasts the expected revenue and expenses before the start of the period. It is not adjusted even if the level of activity subsequently changes.

To explain: The things provided by a flexible budget that are not possible by a simple comparison of the planned budget to actual results.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 9 - Prob. 1Q Ch. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3Q Ch. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - Prob. 10Q

Solution Summary: The author explains that a static budget does not make adjustments for the level of activity during the period that is why it is difficult to identify and interpret discrepancies between budgeted and actual costs.

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Chapter 9 Solutions