Week 8 checkpoint - budgeted numbers showing any variances between numbers Budget reports are an extremely useful resource when evaluating a

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A flexible budget is based on how costs vary with different rates of production or at different levels of sales volume. It projects revenue based on these different output levels. There are four major steps that should be followed when creating a flexible budget, (Axia Chapter 8), 1) Identify the activity index and the relevant range of activity. 2) Identify the variable costs, and determine the budgeted variable cost per unit of activity for each cost. 3) Identify the fixed costs, and determine the budgeted amount for each cost. 4) Prepare the budget for selected increments of activity within the relevant range. Information generated off of the budget creates a flexible budget report which in turn provides two pieces of pertinent information. One is specific production data and another is cost data for variable and fixed costs. This report will show how the actual results compare to the
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Unformatted text preview: budgeted numbers; showing any variances between numbers. Budget reports are an extremely useful resource when evaluating a manager’s efficiency. It is important to include all items a manager can control. If there are other areas in the budget that the particular manager is not responsible for then it is not fair to them to include it in the performance evaluation. References Axia College of University of Phoenix. (2009). Budgetary Control and Responsibility Accouting. Retrieved August 5, 2007, from Axia College, Week Seven reading, aXcess, ACC220 – Survey of Accouting: The Maze of Numbers. CliffsNotes.com. Flexible Budgets. 7 Aug 2009 From http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-21248,articleId-21241.html...
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This note was uploaded on 09/14/2010 for the course AXIA COLLE All taught by Professor Unk during the Spring '10 term at University of Phoenix.

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Week 8 checkpoint - budgeted numbers showing any variances between numbers Budget reports are an extremely useful resource when evaluating a

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