CN07HO - Flexible Budgets, Variances, and Management...

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2005 UofW Business School Accounting 311 L.DuCharme 1 Flexible Budgets, Variances, and Management Control: I Chapter 7
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2005 UofW Business School Accounting 311 L.DuCharme 2 Standard—budget Here budgeted amount = standard amount We will use these terms interchangeably in this course. However, some will define differently.
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2005 UofW Business School Accounting 311 L.DuCharme 3 Variances Variance = budgeted – actual results If operating income is greater than expected (budget), then you have a favorable variance. Not all favorable variances are “good.”
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2005 UofW Business School Accounting 311 L.DuCharme 4 Distinguish a static budget from a flexible budget. Learning Objective 1
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2005 UofW Business School Accounting 311 L.DuCharme 5 Static and Flexible Budgets Static Budget Planned level of output at start of the budget period Based on Flexible Budget Budgeted revenues and cost based on actual level of output Based on
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2005 UofW Business School Accounting 311 L.DuCharme 6 Example Calculate Variances
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2005 UofW
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This note was uploaded on 04/07/2008 for the course ACCTG 311 taught by Professor Ducharme during the Spring '08 term at University of Washington.

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CN07HO - Flexible Budgets, Variances, and Management...

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