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Spending more than planned (Budgeted for) for a specific purpose.
Managers compare the actual line item amounts for manufacturing overhead with the budgeted amounts. Managers investigate large differences between actual and budgeted amounts to identify the reasons why actual costs differ from planned or budgeted costs.
Labor. Fixed rate for hours planned; variable rates for unscheduled overtime.
A traditional budget is often referred to as a "static budget." A static budget is not designed to change with changes in activity level. Once sales and expenses are estimated, they become the relevant benchmarks. A flexible budget is an alternative that has some compelling advantages. It relates anticipated expenses to observed revenue. To illustrate, if a business greatly exceeded the sales goal, it is reasonable to expect costs to also exceed planned levels. After all, some items like cost of sales, sales commissions, and shipping costs are directly related to volume. How ridiculous would it be to fault the manager of the business for having cost overruns? Conversely, failing to meet sales goals should be accompanied by a reduction in variable costs. Certainly it would make no sense to congratulate a manager for holding costs down in this case! A flexible budget is one that reflects expected costs as a function of business volume; when sales rise so do certain budgeted costs, and vice versa. The flexible budget responds to changes in activity, and may provide a better tool for performance evaluation. It is driven by the expected cost behavior. Fixed factory overhead is the same no matter the activity level, and variable costs are a direct function of observed activity. When performance evaluation is based on a static budget, there is little incentive to drive sales and production above anticipated levels because increases in volume tend to produce more costs and unfavorable variances. The flexible budget-based performance evaluation provides a remedy for this phenomenon.
EXCESS OF REVENUE OVER EXPENSESEXCESS OF REVENUE OVER EXPENSES in the not-for-profit sector. There is a common misconception that not-for-profit organizations are not allowed to have a financial cushion as they are 'not-for-profit'. In this context it is useful to remember that not-for-profit organizations are also 'not-for-loss' organizations. An organization cannot sustain losses over the long term without ceasing to operate or going bankrupt. Excess of revenue over expenses is the planned financial position that there will always be a sufficient amount of funds on hand to continue to run the not-for-profit entity for some period without additional funding; usually 3-4 months.
You should make sure that all of your planned monthly expenses do not exceed your monthly income.
Spending more than planned (Budgeted for) for a specific purpose.
Budgeted income statement is the projected or planned income statement based on standard amounts to foresee the future business or company position before it
Income = 1700 Planned spending on Utilities = 4% Amount spent = 1700 * (4/100) = 68 She will spend 68 bucks on her utilities.
Only if expenses where occurred.
Managers compare the actual line item amounts for manufacturing overhead with the budgeted amounts. Managers investigate large differences between actual and budgeted amounts to identify the reasons why actual costs differ from planned or budgeted costs.
How frequently the plants will be watered
There are few benefits to a centrally planned (controlled) economy. One benefit might be that the amount of funds used to manufacture a particular product can be firmly budgeted for. Thus there are no surprises or cost over runs.
There are few benefits to a centrally planned (controlled) economy. One benefit might be that the amount of funds used to manufacture a particular product can be firmly budgeted for. Thus there are no surprises or cost over runs.
Labor. Fixed rate for hours planned; variable rates for unscheduled overtime.
Budget variances are differences in expenditures from your original budgeted plan. This may happen if there is an expense during the month that one may not have planned for such as an automotive repair or doctor's bill.
There are few benefits to a centrally planned (controlled) economy. One benefit might be that the amount of funds used to manufacture a particular product can be firmly budgeted for. Thus there are no surprises or cost over runs.