1 What are flexible budgets? A flexible budget is a budget prepared for a different level of activity. Example 1 A company manufactures a single product and the following comparisons are availab month of April. variance Unit produced $ Direct Material Labour Production Overheads Administration Overheads Selling & distribution Total cost Budget 1200 units $ 19200 13200 24000 21000 16400 93800 Actual 1000 units $ 16490 12380 24120 21600 16200 90790 The followings are the fixed cost elements in the budget Labour Production overhead Administration overhead Selling & distribution overhead 8400 18000 21000 14000 Prepare a flexible budget 1 What are flexible budgets? A flexible budget is a budget prepared for a different level of activity. Example 1 A company manufactures a single product and the following comparisons are availab month of April. variance Unit produced $ Direct Material Labour Production Overheads Administration Overheads Selling & distribution Total cost Budget 1200 units $ 19200 13200 24000 21000 16400 93800 Actual 1000 units $ 16490 12380 24120 21600 16200 90790 The followings are the fixed cost elements in the budget Labour Production overhead Administration overhead Selling & distribution overhead 8400 18000 21000 14000 Prepare a flexible budget