Flexible Budget

planning

controlling

planning and controlling

the controlling step

the planning step

budget risk

is a static budget

is prepared for at least 2 levels of sales volume

is flexible

can increase

is the difference between

can decrease

an actual amount decreases operating income

the budget amount is equal to the operating income

an actual amount increases operating income

an actual amount decreases operating income

the budget amount is equal to the operating income

an actual amount increases operating income

summarizes revenues and expenses for only one level of sales volume

summarizes revenues and expenses for various levels of sales volume

summarizes revenues and expenses for the income statement

to take corrective actions

to pinpoint problems

both

actual results and the expected results in the flex budget

master budget results and the expected results in the static budget

actual results and the expected results in the master budget

Flexible budget variance and Sales volume variance

Master budget variance and Sales volume variance

Static budget variance and Sales volume variance