Explain the static and flexible budget

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Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

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Lao Enterprises is preparing its direct labor budget for June. Projections for the month are that 18,200 units are to be produced and that direct labor time is 2.5 hours per unit. If the labor cost per hour is $14, what is the total budgeted direct labor cost for June?

ABC Company produced 15,000 units and sold 12,000 units during its first year. The company provided the following information: Particulars Per unit Per year Selling price $180 Direct materials $45 Direct labor $30 Variable manufacturing overhead $15 Sales commission $9 Fixed manufacturing overhead ? Fixed selling and administrative expense $315,000 If the company's unit product cost under absorption costing is $120, what is the amount of fixed manufacturing overhead per year? a. $450,000 b. $360,000 c. $375,000 d. $480,000

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Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

Answer 6

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.

Answer 7

Chapter 8, Problem 1LO

To determine

Explain the static and flexible budget

Answer 8

Expert Solution & Answer

Explanation of Solution

Flexible budgets are those which estimate the revenue and costs for different levels of activity whereas static budget is where it estimates the planned or expected volume of activity.

Flexible budget are used for the evaluation of performance and static budget is used for the purposes of planning in estimating the materials, labor, equipment, and cash for various levels of activity.

The volume impact on budget variance is isolated by allowing the managers, departments, and employees to be estimated on the price and usage of labor, material, and overheads.