You work for a manufacturing company and have just completed thebudget process for the upcoming business year. At the end of thefirst quarter you take the actuals and compare them to the budget.You notice there are differences which need explanation and createthe static and flexible budget variances. You present this tomanagement and they request you to explain the variances in moredetail.
You go and create the Flexible Budget Performance Report andpresent this. You also need to explain the reasons for thevariances and who is responsible. Explain the calculations used tocreate this report.
Explain why the variances using standard costs better reflectthe actual variance and how to determine who is responsible foreach variance
