What is a static budget?
is a budget prepared for one sales level. Which is usually forecasted sales for the upcoming year.
What is a flexible budget?
is a budget for various sales levels usually are actual sales during the year.
What is management by exception?
is the concept that managers should only spend their time explaining significantly large favorable or unfavorable variances.
What does a favorable revenue variance mean?
That means that actual sales revenue is greater than what was anticipated.
What does an unfavorable spending variance mean?
When we spent more on perks and products, paying employees than we planned to spend throughout the year. Spent more than we thought.