Web Chapter 24 - Flexible Budgets and Standard Costs...

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Flexible Budgets and  Flexible Budgets and  Standard Costs Standard Costs Chapter 24 Chapter 24
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Management uses budgets to monitor and control operations. Develop the budget from planned objectives. Compare actual with budget and analyze any differences. Take corrective and strategic actions. Revise objectives and prepare a new budget. Budgetary Control and  Budgetary Control and  Reporting Reporting
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Fixed Budget               Fixed Budget               Performance Report Performance Report Budget Actual Variance Sales (in units) 91,000 101,000 10,000 F Price $2.00 $1.95 ($0.05) U Sales (in dollars) $182,000 $197,000 $15,000 F Quarter 1 Red River Foods Sales Department (Ted Underhill, Manager) Fixed Budget Performance Report for Q1 2008
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Per Unit Budget Actual Variance Production (in units) 106,600 116,600 Variable product costs Direct materials Russet potatoes $0.42 $44,772 $51,344 ($6,572) U Bags 0.03 3,198 3,498 (300) U Adhesive
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Web Chapter 24 - Flexible Budgets and Standard Costs...

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