Flexed budgets Flashcards
1
Q
Feedforward system
A
Comparing budgeted results against a forecast.
2
Q
Feedback system
A
Compares actual historical results with budgeted results.
3
Q
Example of a feedforward system
A
4
Q
Example of a feedback system
A
5
Q
How to work out the variable flexed budget cost
A
Original budget £ / Original budget units x Flexed budget units
6
Q
How to work out semi variable flexed budget cost
A
Use high low method:
7
Q
Limitations of a flexible budget
A
-Difficult to split costs into fixed and variable elements
-assumes fixed costs are fixed irrespective of the output level
-assumes all variable costs are linear irrespective of the output level
8
Q
Advantages of flexible budget
A
9
Q
What is flexible budgeting primarily used for
A
Control
10
Q
A
