Flexible Budget: A budget which is forecasted on the basis of variance in outputs which ultimately leads to variance in the relative costs and the revenue thereof is known as flexible budget. It is broader approach to plan budget as it can be altered at any time depending upon the needs of the business. Fixed Costs: Fixed costs are the costs which are uniform over a period of time and irrespective of variances in the output or any other operations of the firm remain constant .They are to be incurred by the businesses even if they do not indulge into their basic business activities. Variable Costs: Variable costs are directly linked to the operations of the business. It undergoes change with respect to changes in the volume of production of the firm over a period of time. It is directly proportional to variations in the business activities. To explain: Flexible budget amounts of fixed and variable costs for 20,000 units.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 2QS

To determine

Flexible Budget:

A budget which is forecasted on the basis of variance in outputs which ultimately leads to variance in the relative costs and the revenue thereof is known as flexible budget. It is broader approach to plan budget as it can be altered at any time depending upon the needs of the business.

Fixed Costs:

Fixed costs are the costs which are uniform over a period of time and irrespective of variances in the output or any other operations of the firm remain constant .They are to be incurred by the businesses even if they do not indulge into their basic business activities.

Variable Costs:

Variable costs are directly linked to the operations of the business. It undergoes change with respect to changes in the volume of production of the firm over a period of time. It is directly proportional to variations in the business activities.

To explain: Flexible budget amounts of fixed and variable costs for 20,000 units.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

I am looking for a reliable way to solve this financial accounting problem using accurate principles.

Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $300,000. He sold the home on January 1, 2024, for $320,000. How much gain must Troy recognize on his home sale in each of the following alternative situations? Note: Leave no answer blank. Enter zero if applicable. d. Troy rented out the home from January 1, 2007, through December 31, 2019. He lived in the home as his principal residence from January 1, 2020, through December 31, 2020. He rented out the home from January 1, 2021, through December 31, 2021, and lived in the home as his principal residence from January 1, 2022, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $0. Note: Do not round intermediate calculations.

I need help finding the accurate solution to this financial accounting problem with valid methods.