Flexed budget

This topic has 3 replies, 3 voices, and was last updated 5 years ago by John Moffat.

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May 14, 2020 at 3:05 pm #570829
pinkyjovin123
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Hello sir,

Budget. Actual
Sales 120000. 100000

Sales rev 1200000 995000

Variable printing costs
360000 280000

How do we get the flexed budget figures like 1000 and 300?

Many thanks
May 14, 2020 at 3:37 pm #570839
John Moffat
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The budgeted sales price per unit is $1,200,000 / 120,000 = $10 per unit.
Therefore the flexed budget revenue for 100,000 units is 100,000 x $10.

The budgeted variable costs per unit is $360,000 / 120,000 = $3 per unit.
Therefore the flexed budget for 100,000 units is 100,000 x $3.

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July 8, 2020 at 4:57 pm #576355
teddylove
Member
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Dear sir, for flexed budget, i would like to double confirm

for service industry in order to derive at Std cost, we would flex with ‘actual sales unit’

for production industry, we would flex with ‘actual production unit’
July 9, 2020 at 7:40 am #576390
John Moffat
Keymaster
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For a production company we flex the costs with the actual units produced.

For a service company there are no units produced. But depending on the wording of the question we would most likely flex the costs according to the level of sales.
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