Choice of budget flexing basis, Cost Accounting

Choice of Budget Flexing Basis

The most suitable flexing basis must be considered where it assists in the comparison of alternative budget data at the planning stage and for the comparison of budget and real data at the control stage.

Various organizations employ various flexing bases however the following are most commonly utilized:

  1. Machine hours
  2. Direct labour hours
  3. Input to a cost centre
  4. Output from a cost centre

For the above specified flexing bases to be utilized a number of requirements must be fulfilled.

1. The flexing bases must be correlated along with the way in which costs vary. As an example of, does the number of miles traveled via distribution vehicles affect the maintenance and repairs expenses?

2. The flexible bases must be easily understood with the management and not subject to manipulation.

3. The flexible bases must be readily obtainable.

4. It must be independent of other factors.

Posted Date: 2/7/2013 4:48:44 AM | Location : United States







Related Discussions:- Choice of budget flexing basis, Assignment Help, Ask Question on Choice of budget flexing basis, Get Answer, Expert's Help, Choice of budget flexing basis Discussions

Write discussion on Choice of budget flexing basis
Your posts are moderated
Related Questions
Stopover industries ltd, a recently incorporated company plans to go into production next year. the following standard cost matrix has been assembled for one of the products it pro

High - Low Method of Cost Estimation Now, cost estimation is based upon the relationship between past level and past cost of activity. Variable cost is based on the relationsh

Tony Allan Inc is a small manufacturer of metal products in Toronto.  The company rents its factory building.  It uses a job order costing system because it has a wide variety of p


This coursework is intended to help you develop your understanding of shell scripting in both a Windows and Unix environment. You should undertake this coursework in groups cons

Hale Company makes sets of wrenches. They are trying to decide whether to continue to make the case the wrenches are sold in, or to outsource it to another company. The direct mate

Explain the following types of costs. a. Fixed and variable costs b. Explicit and implicit costs c. Direct and indirect costs d. Past and future costs e.

Importance of Variance Analysis Variance analysis is aimed at getting practical pointers to the purposes of off-the -standard performance hence management can improve operatio

The following information is available for the automotive division of Ford Motor Company for 2009.  The company uses the LIFO inventory method.

DEMERITS OF BREAK EVEN POINT 1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc 2. Fixed cost, enti