COMM-2016EL Chapter Notes - Chapter 12: Cost Driver, Financial Statement, European Cooperation In Science And Technology

• School: Laurentian
• Department: Commerce and Administration
• Course: COMM-2016EL
• Professor: Kayla Levesque

Document Summary

Chapter (cid:1005)(cid:1006) fle(cid:454)i(cid:271)le budgets & varian(cid:272)e anal(cid:455)sis. Flexible budgets: the bridge between static budgets & actual results. Static budget is another name for the master budget. Performance report is a generic term that usually means a comparison of actual results with a budget : a helpful performance report with include variances that direct upper-management"s attention to significant deviations from expected results. Master (static) budget variances the variances of actual results from the master budget. Favourable variances - actual revenues that exceed expected revenues. Unfavourable variances - budgeted revenues that exceed actual revenues. Flexible budget a budget that adjusts for changes in sales volume and other cost-driver activities. The flexible budget is based on the same assumptions of revenue and cost behaviour, within the relevant range, as the master budget cost behaviour is illustrated by cost functions or flexible-budget formulas. The flexible budge incorporates how each cost and revenue is affected by changes in a single cost driver"s activity.