Assume that the amount of one of a company's fixed expenses in its flexible budget is $46,000. The actual amount of the expense is $47,400 and the amount in the company's planning budget is $46,000. The spending variance for this expense is: Multiple Choice O $0. $1,400 U. $1,400 F.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Spending variances are based on the difference of Actual costs and Flexible budget costs. Fixed costs in flexible budget is the same as in planning budget. Spending variance will be computed as Actual costs reduced by Flexible costs.
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