Class Notes (1,100,000)
CA (620,000)
Ryerson (30,000)
ACC 406 (200)
Lecture 9

ACC 406 Lecture Notes - Lecture 9: Stabilisation Force In Bosnia And Herzegovina


Department
Accounting
Course Code
ACC 406
Professor
Alison Beavis
Lecture
9

This preview shows page 1. to view the full 5 pages of the document.
Flexible Budgets and Overhead Analysis CH11
Performance Reports
Compare actual costs with budgeted costs for the budgeted level of activity
Two ways
o Static budget- compare actual costs with budgeted costs for the budgeted level
of activity
o Flexible budget- compare actual costs with the actual level of activity
Static Budget
Budget for one particular level of activity
Compares direct materials, direct labour, and overhead costs budgeted for the planned
level of activity with actual costs for the actual level of activity
Actual costs and expected costs must be compared at the same level of activity
Unfavourable variances result when actual production exceeds the planned level
Flexible Budget
enable firms to compute expected costs for a range of activity levels
two types
o before-the-fact
allows managers to see the expected outcomes for a range of activity
used to generate financial results for a number of plausible scenarios
o after-the-fact
created for the actual level of activity
used to compute what costs should have been for the actual level of
activity levels
expected costs are then compared with the actual costs in order to assess
performance
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version

Only page 1 are available for preview. Some parts have been intentionally blurred.

Performance Report, Flexible Budget
The performance report, using flexible budget values that are based on actual activity
levels achieved, will highlight the operational differences between expected
performance and actual performance
This will assist us in identifying what explanations are required and, possibly, what
corrective actions need to be taken
The difference between the actual amount and the flexible budget amount is the
flexible budget variance
Overhead Variance Analysis
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version