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Assignment: a. Explain your understanding of activity flexible budgeting in terms of the relationship between changes in activity costs and changes in activity drivers.
b. Discuss how activity flexible budgeting helps managers plan and monitor activity improvements.
c. Below is the information on four overhead activities for AlKauthar Ltd.:
Fixed Cost
Variable Rate
Machine hours
Setting up
Purchase orders
i. Prepare an activity-based flexible budget for the following production levels:
32,000 units
64,000 units
Setups
ii.As an accountant, how would you utilize the above information in meeting your responsibility for budgeting and controlling costs?
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