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Sir, you said in your lecture on budget that we make budget so that we can compare them with the actual activity.
But I am confused that sometimes we compare budgeted activity with the actual activity and sometime we compare budgeted activity with the standard activity in variances.
In what variances do we compare budgeted with actual; and the rest we compare budgeted with standard.
Please help me with this one because I am totally messed up.
For all variances we compare the actual results with the flexed budget (i.e. the budget re-written for the actual level of activity).
Sir, I am not referring to the flexed budget where we compare actual activity with the flexed activity but rather I am referring to the variance where sometimes we compare budgeted activity with the actual activity, and sometimes we compare budgeted activity with the standard activity in variances.
In what variances do we compare budgeted with actual; and the rest we compare budgeted with the standard.
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