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Flexible Budgets, Direct-Cost Variances, and Management Control
Flexible Budgets, Direct-Cost Variances, and Management Control
Chapter 1
Flexible Budgets, Direct-Cost Variances, and Management Control
Variance: difference between actual results and expected (budgeted/planned) performance.
Uses of Variances:-
Unfavorable variances has the effect of operating income (Negatively).ليس شرط ان يكون سالب
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Taha Wael Qandeel Cost Accounting II
The only difference between the static budget and the flexible budget is that the static
budget is prepared for the planned output planned at the begging of the period, whereas
the flexible budget is based on the actual output at the end.
If we have to assess the performance of the manager, we prefer the flexible budget.
1- Sales-Volume Variances
The sales-volume variance is the difference between the static budget for the number of units
expected to be sold and the flexible budget for the number of units that were actually sold.
The original
method
Contribution
margin
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Taha Wael Qandeel Cost Accounting II
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Taha Wael Qandeel Cost Accounting II
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Taha Wael Qandeel Cost Accounting II