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April 21, 2020 at 12:50 pm
Hi sir, I don’t understand how you actually calculate the flexed budget and also on how you arrived at $5 for revenue, 2.5 for labour and 1.5 for overhead. I would’t mind also if you explain why flexed budget is needed and it usefulness.
John Moffat says
April 21, 2020 at 3:31 pm
The purpose of the flexed budget is so we can compare what actually happened with what should have happened for the actual level of activity. I do explain this in the lecture and expand on it in the following lectures on variance analysis.
As far as the revenue and the variable costs are concerned, the budgeted revenue was 100,000 for sales of 10,000 units and therefore the revenue should be 100,000/10,000 = $10 per unit. It is the same logic for the variable costs.
May 17, 2019 at 7:42 pm
Dear Sir, I trust you are well. How did you calculate the contribution of 12500 and 18500? Many thanks
May 17, 2019 at 7:44 pm
Sorry, I understand now.
November 23, 2018 at 1:51 pm
Hi. In case of a service industry, flexed budgeting is possible?
November 23, 2018 at 2:33 pm
Yes, but then you would flex on the number of services – not obviously on the number of units produced.
November 9, 2018 at 10:58 am
Sir is ABB- activity based budgeting important ?? Just asking because you didn’t talk about it in the lectures..
Less important (and certainly not for calculations).
November 5, 2018 at 9:44 am
Thanks John. The flexed budget prepared at the end of the budget period and is based on the actual level of activity using the original standard price and cost. The difference between the flexed budget and actual result is the variance.
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