Budgeting

Question 1

Flexible Budget

Answer 1

A budget prepared for several possible levels of production (or adjusted for the level of production achieved.

Question 2

Steps to reconstruct flexible-budget analysis

Answer 2

Step 1. Calculate the budgeted unit sales price: Budgeted revenue / Budgeted unit sales
Step 2. Calculate the actual unit sales price: Actual revenue / Actual unit sales
Step 3. Calculate the difference between the budgeted and actual unit price: Budgeted sales price - Actual sales price

Question 3

How many levels of interdependence in integrated planning?

Answer 3

Three

1. Pooled - There is a common source of resource, but no interrelationship between the work groups.
2. Sequential - The work groups coordinate the flow of information, tasks, or resources from one group to another.
3. Reciprocal - Information, tasks, and resources are passed back and forth between the groups.