BU247 Lecture Notes - Lecture 8: Net Income
Document Summary
Static budget = the budget that the organization prepares at the beginning of the period. It is based on the planned level of sales, on the standard selling price per unit, and on the standard costs (standard variable costs per unit, and standard total fixed costs) All expected prices, and costs and unit sales. Flexible budget = the flexible budget is a new concept. As we will see in the problem we are about to use as illustration, the flexible budget is a copy-and-paste of the standard budget but flexed at the actual level of sales. The flexible budget presents the results that the company should have had with the actual sales units if they had kept everything else (selling price, costs) at the standard level. All expected prices and costs, but actual unit sales. Actual results = reflects the actual sales units, the actual selling price per unit, and all the actual cost.
