Flexible Budgets and Performance Analysis

Flashcards covering key vocabulary and concepts related to flexible budgets and performance analysis.

Performance Report

A budget versus actual report.

Variances

Amounts that differ from the budget.

Static Budget

A budget based on a certain amount of sales, where the rest of the budget falls into place.

Flexible Budget

A budget that can be prepared for any activity level within the relevant range.

Flexible Budget

Shows costs that should have been incurred at the actual level of activity, enabling an apples to apples cost comparison.

Activity Variance

Arises solely due to the difference in the actual level of activity and the level of activity from the planning budget.

Revenue Variance

The difference between actual revenue and flexible budget revenue.

Spending Variance

The difference between an actual cost and the flexible budget cost.