Notes_chapter_10 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
I.  PLANNING  vs. FLEXIBLE BUDGETS A.  PLANNING BUDGETS (i.e., STATIC BUDGETS) A planning budget  is created at the beginning of the budgeting  period and is valid only for the budgeted level of activity; suitable  for planning. B.  FLEXIBLE BUDGETS A flexible budget  reflects costs that should have been incurred  given the actual level of activity during the period; useful in  evaluating how well costs were controlled. II. PERFORMANCE REPORTS USING FLEXIBLE BUDGETS A.      In a performance report focused on cost control, actual costs  should be compared to the flexible budget for the  actual  level of  activity—not the budget for the planned level of activity. B.     ACTIVITY VARIANCES - - C.    REVENUE and SPENDING VARIANCES - Compare what revenues/costs SHOULD HAVE BEEN given the  actual level of activity to actual costs incurred/revenues  generated during the period. 1)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/01/2011 for the course ACCOUNTING 230 taught by Professor Allen during the Spring '11 term at Texas A&M.

Page1 / 6

Notes_chapter_10 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online