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John Moffat.
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AshleyMarc1997
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Is it correct that Flexed actually mean to calculate total standard cost by flexing standard cost per unit with actual production which is what we do in Flexed budget like this:
[Standard cost per unit x Actual Production]
This is exactly what we do in the variances where we compare Actual cost and Standard cost with actual production where the difference is variance?
So can we say that variance is the difference between actual cost and flexed cost where flexed cost is calculated in same way like [standard cost per unit x Actual Production]
Flexed and Standard costs are terms used interchangeably?
Is that true?
John Moffat
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What you have written is correct, except for the last line.
The standard cost is the budgeted cost per unit. The flexed cost is the standard total cost for the actual production.
AshleyMarc1997
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