week 3 Learning team C - Introduction The objective of this...

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Introduction The objective of this paper is to go over the budget process. It will defined the purpose of flexible budgets and explains the relationship between fixed costs and variable costs. Moreover, the paper will go on and evaluate the difference between static budgets and flexible budgets. Last but not lease, the paper will illustrate how budgets can assist in the cost-volume-profitability analysis. The Purpose of Flexible Budgets Businesses use budget as a tool to calculate expected revenues and expenses. Businesses are aware of the fact that it is hard to plan for the future. Unexpected events in the economy can abruptly surface and change a company’s financial position overnight. Businesses try to prevent this from happening by increasing their budget flexibility. This can be achieved by analyzing the relationship between fixed and variable costs, apply techniques to change the static budget, and utilize flexible budgets to perform cost-volume-profit analysis. The relationship between fixed and variable costs used in a flexible budget
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This note was uploaded on 06/25/2011 for the course ACC 280 280 taught by Professor Lindaking during the Spring '10 term at University of Phoenix.

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week 3 Learning team C - Introduction The objective of this...

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