Asked by Andrew Young on Jun 25, 2024
Verified
The flexible budget report evaluates a manager's performance in two areas: (1) production and (2) costs.
Flexible Budget Report
A budget that adjusts or flexes with changes in volume or activity, providing a more useful comparison of actual to budgeted performance.
Production
The process of creating goods or services using labor, technology, materials, and other inputs.
Costs
Expenses incurred in the process of creating, manufacturing, or providing a service or product, including fixed, variable, and semi-variable costs.
- Set apart static from flexible budgets and grasp their implications on the control exercised by managers.
Verified Answer
BR
Bailey RobinsonJun 25, 2024
Final Answer :
True
Explanation :
The flexible budget report is designed to evaluate a manager's performance in relation to both production and costs. By comparing actual results against what was budgeted and what could have been budgeted based on the actual level of output, managers are able to determine where their performance met expectations or exceeded them, as well as areas where they fell short. This information can then be used to make strategic decisions and identify areas where improvements can be made in the future.
Learning Objectives
- Set apart static from flexible budgets and grasp their implications on the control exercised by managers.