3 Words for a COVID-19 World: Flexible Budget Variance

ContentAdvantages of flexible budgetingUsage in Variable Cost EnvironmentBetter Cost ControlsDisadvantagesSales Volume as a Measure of Activity of a Flexible Budget However, this approach ignores changes to other costs that do not change in accordance with small revenue variations. Consequently, a more sophisticated format will also incorporate changes to many additional expenses when certain larger revenue changes occur, thereby accounting for step costs. By incorporating these changes into the budget, a company will have a tool...