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The flexible budget represents the (hypothetical) budget that Spring would have prepared if it had correctly forecasted both the actual total number of cases sold and the actual mix of sales.
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Flexible Budget and Sales Volume Variances17•Now, we have the information that we need to identify the components of the static budget variance.•The analysis begins with the decomposition of the static budget variance into the flexible budget variance and the sales volume variance.•That decomposition is presented on the following slide.