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Chapter 23: Q7RQ (page 1305)

Question:What is a flexible budget performance report?

Short Answer

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Answer

The flexible budget performance report comparesactual performance with budgeted performance.

Step by step solution

01

Definition of Budget

A budget is defined as the estimation prepared by the company's management to forecast the revenues and expenses for the future period.

02

Flexible Budget Performance report

The management creates the flexible performance report to compare the revenues and expenses incurred during the period with the revenues and costs presented in the flexible budget. Simply put, it comparesactual results with the budgeted results of actual sales quantity.

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Most popular questions from this chapter

Question: How do flexible budgets differ from static budgets?

In 75 words or fewer, explain what a cost variance is and describe its potential causes.

Question: How is a flexible budget used?

Explain the difference between a favorable and an unfavorable variance.

Martin, Inc. is a manufacturer of lead crystal glasses. The standard direct materialsquantity is 1.0 pound per glass at a cost of \(0.50 per pound. The actual result for onemonth’s production of 6,500 glasses was 1.2 pounds per glass, at a cost of \)0.30 perpound. Calculate the direct materials cost variance and the direct materials efficiencyvariance.
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