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| A comparison of budgeted costs at the budgeted activity level with actual costs at the actual activity level is meaningless if there is a significant difference between budgeted and actual activity levels.
| | ''UK government''. |
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| If actual costs are dramatically higher than budget, it does not necessarily mean that costs are out of control, if sales levels are dramatically higher than planned.
| | Government Equalities Office. |
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| Actual fixed costs should be the same as budgeted, regardless of changes in sales levels – only the variable costs should change.
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| It is essential that actual costs and revenues are compared with planned amounts.
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| However, to make the comparison meaningful, it is essential to adjust the variable cost element of the budget to reflect the actual activity levels.
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| This process is referred to as ‘flexing the budget’.
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| == See also == | | == See also == |
| * [[Fixed cost]] | | * [[30% Club]] |
| * [[Variable cost]] | | * [[D&I]] |
| * [[Variance]] | | * [[Diversity]] |
| * [[Zero based budgeting]] | | * [[Gender pay gap]] |
| | | * [[Government Equalities Office]] |
| [[Category:The_business_context]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]] | |
Revision as of 18:22, 6 October 2018
UK government.
Government Equalities Office.
See also
