Flexible Budget Essay

What is a malleable cypher?A flexile raiset projects budget data for various levels of activity. The flexible budget is a series of electrostatic budgets at different levels of activity. The flexible budget recognizes that the budgetary suffice is more useful if it is adaptable to changed operation conditions. Flexible budgets can be prep atomic number 18d for separately of the types of budgets include in the master budget, so depending on your particular business you will have different budgets in your flexible budget. What are the steps to developing a flexible budget?The flexible budget uses the master budget as the basis. To develop the flexible budge the following steps need to be taken 1)Identify the activity power and the relevant range of activity 2)Identify the variable monetary values, and determine the budgeted variable cost per unit of activity for each cost. 3)Identify the fixed costs, and determine the budgeted amount for each cost. 4)Prepare the budget for sel ected increments of activity within the relevant range. What information is found on a flexible budget report?Flexible budget reports are a type of internal report. The budget report consists of two sections 1) drudgery data for a selected activity budget such a conduct labor hours and 2) cost data for variable and fixed costs. The report provides a basis for evaluating a managers carrying into action in two areas production control and cost control. Flexible budgets are widely apply in production and service departments How is that information used to evaluate performance?At the end of a budgeted period, you need to find out if your mean expenditures fell in line. The flexible budget is the budget with figures that are base on actual output. It is then compared to a companys static budget to get variances between what level of spending was expected and what very occurred.