【预算管理精品】CH2预算编制.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Accounting for Business * 25% of June sales of $300,000 11,500 lbs. @ $.40 per lb. 50% of June purchases of $56,800 5,000 units @ $4.99 each Accounting for Business * Accounting for Business * Let’s change topics. Flexible Budgeting Accounting for Business * Performance evaluation is difficult when actual activity differs from the activity originally budgeted. Flexible Budgeting Hmm! Comparingcosts at differentlevels of activity is like comparingapples with oranges. Consider the followingcondensed examplefrom the CheeseCompany . . . Accounting for Business * Flexible Budgeting Accounting for Business * U = Unfavorable variance – Cheese Company was unable to achieve the budgeted level of activity. Flexible Budgeting Accounting for Business * F = Favorable variance: actual costs are less than budgeted costs. Flexible Budgeting Accounting for Business * Since cost variances are favorable, havewe done a good job controlling costs? Flexible Budgeting Accounting for Business * I don’t think I can answer the question using the originalbudget. How much ofthe favorable costvariance is due to loweractivity, and how much is dueto good cost control? Flexible Budgeting Accounting for Business * Flexible Budgeting I don’t think I can answer the question using the originalbudget. How much ofthe favorable costvariance is due to loweractivity, and how much is dueto good cost control? To answer the question, we must the budget to the actual level of activity. Accounting for Business * Central Concept If you can tell me what your activity wasfor the period, I will tell you what your costs and revenue should have been. Flexible Budgeting Accounting for Business * Improve performance evaluation. May be prepared for any activity level in the relevant range. Show expenses that should haveocc