Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Reason for the flexed budget
- This topic has 3 replies, 2 voices, and was last updated 9 years ago by John Moffat.
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- March 29, 2015 at 5:01 pm #239430
Hi John
I watched the lecture on Chapter 11 and while you were introducing the flexed budget you said the reason we prepare it is “if we are using it for control purposes…” but then I don’t think you finished the sentence you went straight into example 2
Would the complete sentence be?
“if we are using a budget for control purposes we flex the budget in order to determine how managers performed using the actual level of activity ”
Thanks in advance and apologise if I missed it in the lecture!
Hugh
March 29, 2015 at 8:15 pm #239457What you have written is correct. It would be silly to measure the managers performance by reference to the original (fixed budget) because if we produced more then we would obviously have expected to spend more even if the managers had done their jobs perfectly.
March 29, 2015 at 11:32 pm #239484Yes that’s what I got from the lecture, cheers, makes sense
March 30, 2015 at 7:04 am #239499Great 🙂
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