Ch 11/12 Notes from Supplementary

Question 1

Flexible budgets are prepared after the period begins

Answer 1

Static budgets are prepared before!

Question 2

Actual Budget
Flexible Budget
Static Budget!!!

how do the variances play out and what do they mean

Answer 2

Actual Results- Static Budget= Static Budget Variance

Actual Results-Flexible Budget= Flexible Budget Variance
—-> shows us the data for same level of sales, so did the company operate efficiently at producing at x sales

Flexible Result-Static Budget= Sales Volume Varaiance
—–> shows us data for diff level of sales, so how did our sales team do?

Question 3

Actual Results- Static Budget= Static Budget Variance

Actual Results-Flexible Budget= Flexible Budget Variance

Flexible Result-Static Budget= Sales Volume Varaiance