flex budget - hour your flexible budget would be Fixed...

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Post a 200- to 300-word response to the following: What is a flexible budget? What are the steps to developing a flexible budget? What information is found on a flexible budget report? How is that information used to evaluate performance? A flexible budget changes with the change of activity for a company. It allows showing changes in costs based on the ever changing variables of business, like electricity and other utility costs for example. In order to determine a flexible budget you need to first gather the facts. You would need the fixed costs first and for most, these are constant costs that do not change. Then you would need to figure the costs of activity. If a company has machines and the costs for electricity and man power for the machine is $10 an
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Unformatted text preview: hour your flexible budget would be Fixed costs + $10(hours of activity). A flexible budget is used for planning and controlling. It is based on other budgets information. If production needs for January requires 4,000 machine hours and the fixed costs are approx $40,000 then the flexible budget will show $40,000 + $10(4,000) = $80,000 for January. This information allows a company to budget the cost for future months. If orders for a production come in the manager can determine how many production hours are needed for that month. In turn the information from production needed can be calculated on the flexible budget to determine how much operation costs will be. This helps in assuring that funds are available and monies are not sitting unproductively....
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