IWCC Week 6 Flexible Budget Variance and The Sales Volume Variance Overview

WEEK SIX: The assignments and exams for Chapters Twenty-Two and Twenty-Three should be completed this week.Chapter Twenty-Two deals with Master Budgets. As you go through the chapter, try to think of how you apply a budget to your own household expenses and see if the same process is followed in a business setting. You may notice a remarkable similarity in how we approach budgeting for a business and budgeting in our own personal lives.Chapter Twenty-Three deals with the concept of variances between the budgeted and actual results in a business setting and covers how we can analyze those difference to see how and why they occurred. I encourage you to look carefully at Exhibit 23-5 on page 1259 of your textbook that summarizes the analysis of variances and shows how you can discern the flexible budget variance and the sales volume variance from the static budget variance (please note that page numbers may vary based on different editions of the text). The chapter will also discuss a further drill-down on variance analysis to determine cost variances and efficiency variances within the flexible budget variance.

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