Budgetary Control

Abstract

When you have finished working through this chapter you should be able to

• Differentiate between ideal standards and ATTAINABLE STANDARDS

• Differentiate between controllable costs and UNCONTROLLABLE COSTS, and illustrate this distinction with examples from different levels of the business organisation

• Define the term variance

• Distinguish between favourable and adverse variances and identify appropriate courses of action to be taken in response to such variances arising

• In the context of an example, carry out a detailed variance analysis, including the calculation and interpretation of variances

• Calculate and make use of a flexible budget

• Design a spreadsheet TEMPLATE for drawing up a flexible budgeted income statement