Simply subtract the actual expenditure amount from the budgeted amount for each line item to determine variances in the budget.
Both a master budget and a flexible budget will have the same total fixed costs.
Static Budget: The budget is set up to only cover one level of production volume. A master budget is another name. A consolidated budget that is simple to calculate for a variety of production volume levels is called a flexible budget.
Flexible budget equals fixed costs plus the ratio of the actual unit of activity to the variable cost per unit of activity.
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