Let’s start by having a look at the direct material standard costs that we’re going to use for our example. Budget data Direct materials: 1 metre @ £5 per metre …
Can you accurately predict future costs by looking at previous costs? Or future sales by examining past sales? The next few steps build on what you learned on costing behaviour …
In the real world, even fixed costs can change during a year if a supplier puts up their prices. Likewise, the cost per unit of variable costs might also change. …
Let’s look at a couple of examples to show the difference between fixed, flexible and flexed budgets. In the video the following table is shown: Budget Actual Sales volume …