管理会计讲义6.pptVIP

* This raises an additional question, namely – How much of the cost variances is due to higher activity, and how much is due to cost control? To answer this question, we must “flex” the budget. * Flexing a budget involves two key assumptions about cost behavior. First, total variable costs change in direct proportion to changes in activity; and second, total fixed costs remain unchanged within a specified activity range. * Let’s continue the Larry’s Lawn Service example by preparing a flexible budget at the actual level of activity. * Larry’s flexible budget for an activity level of 550 lawns