why Flexible Budgets - Flexible Budgets In contrast to a...

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Unformatted text preview: Flexible Budgets In contrast to a static budget, which is based on one level of activity, a flexible budget projects budget data for various levels of activity. In essence, the flexible budget is a series of static budgets at different levels of activity . The flexible budget recognizes that the budgetary process is more useful if it is adaptable to changed operating conditions. Flexible budgets can be prepared for each of the types of budgets included in the master budget. For example, Marriott Hotels can budget revenues and net income on the basis of 60%, 80%, and 100% of room occupancy. Similarly, American Van Lines can budget its operating expenses on the basis of various levels of truck miles driven. Likewise, in the Feature Story , Duke Energy can budget revenue and net income on the basis of estimated billions of kwh (kilowatt hours) of residential, commercial, and industrial electricity generated. Below, we will illustrate a flexible budget for manufacturing and industrial electricity generated....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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why Flexible Budgets - Flexible Budgets In contrast to a...

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