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June 11

June 11. Extract Flexible v Fixed Budget. Question 1. Flexible Budget – amends budget to show what should be achieved at various levels of activity . This is because figures change . It recognises the way costs behave eg . Fixed and variable.

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June 11

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  1. June 11 Extract Flexible v Fixed Budget

  2. Question 1 • Flexible Budget – amends budget to show what should be achieved at various levels of activity. This is because figures change. It recognises the way costs behave eg. Fixed and variable. • Fixed Budget – an unchanged budget showing only one level of activity.

  3. Question 2a and b

  4. Question 2c

  5. Question 2c • Profit is falling by £900 for every reduction of 10% in activity level!!

  6. Question 3 • Flexed – • Shows ‘true’ position • Shows what costs should have been for different levels of activity • Can be adjusted • Helps give a meaningful comparison • Compare like with like • Fixed • Will not be useful if actual and budget levels are different

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