managerial accounting 16th ed textbook solutions manual chapter 09
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managerial accounting 16th ed textbook solutions manual chapter 09
Chapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 only the planned level of activity. It IS sometimes referred to as a static planning budget because it is nọt adjusted even if the level of activity subsequently changes.9-2 A flexible budget can ber adjusted to reflect any level of activity-including the actual level of activity. By contrast, a st managerial accounting 16th ed textbook solutions manual chapter 09 atic planning budget is prepared for a single level of activ ty and is not subsequently adjusted.9-3 Actual results can differ from the budget for manmanagerial accounting 16th ed textbook solutions manual chapter 09
y reasons. Very broadly speaking, the differences are usually.due to a change in the level of activity, changes in prices, and changes in how effectivChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 vel of activity can have a very big impact on costs. From a manager's perspective, ạ variance that is due to a change in activity is very different from a.variance that is due to changes in prices and changes in how effectively resources are managed. A variance of the first Kind requires very differ managerial accounting 16th ed textbook solutions manual chapter 09 ent actions from a variance of the second kind. Consequently, these two kinds of © The McGraw-Hill Companies, Inc.,variances,should be clearly separatmanagerial accounting 16th ed textbook solutions manual chapter 09
ed from each other. When the budget is directly compared to the actual results, these two kinds of variances are lumped together.9.-5 An activity variChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 dụẹ solely to the difference in the actual level of activity used, in the flexible budget and the level of activity assumed in the planning budget. Caution, should be exercised in interpreting an activity variance. The "favorable" and "unfavprable" labels are perhaps misleading for activity variance managerial accounting 16th ed textbook solutions manual chapter 09 s, that involve costs. A "favorable" activity variance for a cost occurs because the cost has some variable component and the actual level, of activitmanagerial accounting 16th ed textbook solutions manual chapter 09
y is less than the planned level of activity. An "unfavorable" activity variance for a cost occurs because the cost has some variable component and thChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 peripd and how much the revenue should have been given the actual, level of activity. A revenue variance is easy to interpret. A favorable revenue _ variance occurs because the2018. All rights reserved.Solutions Mani”1 QStuDocu.com1This document IS available free ot charge onDownloaded by Pham Quang managerial accounting 16th ed textbook solutions manual chapter 09 Huy (etxx*4you Ortine@gmaii com)revenue is greater than expected for the actual level of activity. An unfavorable revenue variance occurs because themanagerial accounting 16th ed textbook solutions manual chapter 09
revenue is less than expected for the actual level of activity.9-7 A spending variance is the difference between the actual amount of the cost and hoChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 orward. A favorable spending variance occurs becậuse the cost is lower than expected for the actual level of activity. An unfavorable spending variance occurs because the cost is higher than expected for the actual level of activity.9-8 In a flexible budget performance report, the actual results are managerial accounting 16th ed textbook solutions manual chapter 09 not directly compared to the static planning budget. The flexible budget is interposed between thế actual results and the static planning budget. Themanagerial accounting 16th ed textbook solutions manual chapter 09
differences between the flexible budget and the static planninq budget are activity variances.'The differences between the actual results and the fleChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 ts and the static planning budget that are due tochanges in activity (the activity variances) from the differences that are due to changes in prices and the effectiveness with which resources are managed (the revenue and spending variances).9-9 The only difference between a flexible budget based on managerial accounting 16th ed textbook solutions manual chapter 09 a single cost driver and one based on two cost drivers is the cost formulas. When there are two cost drivers, some costs may be a function of the firsmanagerial accounting 16th ed textbook solutions manual chapter 09
t cost driver, some costs may be a function of the second cost driver, and some costs may be a function of both cost drivers.9-10 When actual results Chapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 of activity. This assumption is valid.only tor fixed costs. However, it is unlikely that all costs are fixed. Some are likely to be variable or mixed.9-11 When the static planning budget is adjusted proportionately for a change in activity and then directly compared to actual results, it is, implici managerial accounting 16th ed textbook solutions manual chapter 09 tly assumed that costs should change in proportion to a change in the level of activity. This assumption is valid only for strictly variable costs. Homanagerial accounting 16th ed textbook solutions manual chapter 09
wever, it is unlikely that all costs are strictly variable. Some are likely to be fixed or mixed.© The McGraw-Hill Companies, Inc., 20102Managerial AcChapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid for managerial accounting 16th ed textbook solutions manual chapter 09 H zs1Chapter 9: Applying Excel23Dntn4Revenue516 Í.IIq5Cost ot ingredients56.25 q6Wages and salaries10400Chapter 9Flexible Budgets and Performance AnalysisSolutions to Questions9-1 A planning budget is,, prepared before the period begins ậnd is valid forGọi ngay
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