BEC 4 - Budgeting 2

• Avoid the opportunity costs of noninvested excess cash AND
• minimize the cost of interim financing

• Sales
• Materials
• Labor
• Overhead
• Production
• Purchases
• Cash

• For various levels of operating activity that have variable costs.
• The variable costs are what cause the budget to flex depending on the level of input/ output. Fixed costs don't chg, thus a flex budget isn't needed with all fixed costs.

The static budget is created with a set quantity in mind. Use the actual quantity obtained, then adjust any variable cost amount using the budgeted per unit price to see how the budget would change based solely on a change in quantity

• Income Statement
• Cash Budget
• Balance Sheet
• Statement of Cash Flows (this is reconciled to the cash budget)