Accounting › Section T · Budgeting › Topic T.4
Flexible budgets
A budget built for 10,000 units says little about costs when 12,000 units were made. A flexible budget restates revenue and costs for whatever activity level actually happens, so managers can plan for a range of outcomes and judge results fairly.
In this topic
- When activity differs from the plan
- Static and flexible budgets
- The cost formula
- Quenby Ceramics' cost behaviour
- Worked example: three activity levels
- Planning with a flexible budget
- Choosing the activity measure
- Worked example: hotel housekeeping
- Relevant range and step costs
- Common mistakes to avoid
- Key takeaways
This topic is part of Wuanberri Pro. Checking your access…