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hi Mr.Moffat..we calculate variances by comparing flexed budget with actual result..so why we make fixed budget?because fixed budget does not play any role in calculating variances.so why we make fixed budget?
The fixed budget gives the overall target profit for the year. If something goes wrong and (for example) they have to increase wages for some reason and so the profit will be less, then they will look for ways of saving money elsewhere to try and still make the target profit.
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