Term
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Definition
| a budget created at beginning of the budgeting period that is valid only for the planned level of activity |
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Term
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Definition
| a report showing estimates of what revenues and costs should have been, given actual level of activity for period |
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Term
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Definition
| the difference between a revenue or cost item in the flex budget and the same item in the static planning budget |
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Term
| an activity variance is due solely |
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Definition
| to the diff, between the actual level of act. used in the flex budget and level of act. assumed in the planning budget. |
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Term
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Definition
the difference between actual rev. for the period and how much the revenue should have been
- fav or unfav |
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Term
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Definition
the diff between actual cost and what cost should have been
- fav or unfav |
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Term
| common errors of flex budgets |
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Definition
| one driver is not always accurate enough |
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Term
| options for favorable revenue and spending varience |
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Definition
-increase operating efficiency
- reduce the price of inputs
- protecting the selling price |
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Term
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Definition
| focuses on important variances and ignores trivial ones |
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Term
| Compare static planning budget to actual results when: |
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Definition
| - actual activity level is the same as the budgeted activity level |
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Term
| to understand why actual net operating income differs |
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Definition
| the revenue and spending variances should be analyzed |
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