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I have attached the document with discussions and I need to reply to each one of them on 150 words. APA format and references. shalem_replies.docx Unformatted Attachment Preview Vidya Peddineni - Tuesday, 14 January 2020, 3:06 AM The key concepts of managerial accounting are flexible budgets and standard costs. Basically standard costs are related to the companys manufacturing costs like direct material, capital, labor costs, etc. They are the predetermined costs that are being estimated based on the managements statistics by considering all the direct costs and utility rates. (Standard Costing: Explanation: Accounting Coach., n.d). They serve as the benchmarks for measuring the performance. The two types of standards i.e., price and quantity standards help in measuring the overall performance. Next, flexible budgets adjust according to the change in the activity and are way more useful than a static budget. The budget can be changed from time to time as per the requirement and will include a variable rate per unit of the activity. As a manager, I would use the flexible budget concept as a tool to measure efficiency. I would further use it as a planning tool to forecast the financial outcomes at distinct levels of activity. A flexible budget will help me in evaluating costs and expenses, thus aiding in cost control. Flexible budgets are based mostly on actual figures and they will help limit the expenses in the production process. (What is a flexible budget?: Accounting Coach., n.d). The standard costs, on the other hand, would help me in planning a budget for the production process. In the end, by comparing the actual costs to the standard costs, the variances between them will help me in improving the efficiency of the operations. (Wilkinson, J., 2019). Flexible budget variances are highly volatile and change with the change in the volume of activity in the production. It helps managers to increase their effectiveness and efficiency as it is usually considered as a benchmark to the organizational performance. They could serve as a proper benchmark when compared to the static budget variances. This is because they could easily perform budgetary control which is the comparison of the actual outputs to that of the budget. (What is a flexible budget?: Accounting Coach., n.d). Flexible budget variances will help managers to consider various scenarios and thus there will always be calculated costs and revenues for multiple scenarios with the managers, enabling the management to deal with any kind of scenario. Managers can gain insight into the causes of flexible-budget variances for direct materials, labor and overhead by dividing the flexible budget variance in terms of price variance. As a flexible budget is based over the actual figures will help gain insights into the cost control and in determining the favorable and unfavorable parts of the production process and in improving the process for better. As a flexible budget adjusts the varied levels of a budget it is also called a variable budget. The variable budgeted price per unit can be found by dividing the strategic budget. In this example for 30,000 Units, $2 will be the material cost, the variable factory expenses will be around $0.80, and the labor costs will be $1.50 per unit. All these costs, when multiplied by the sold units in actual, would be 40,000 units. References: Standard Costing: Explanation: AccountingCoach. (n.d.). Retrieved January 9, 2020, from https://www.accountingcoach.com/standard-costing/explanation. What is a flexible budget?: AccountingCoach. (n.d.). Retrieved January 9, 2020, from https://www.accountingcoach.com/blog/flexible-budget. Wilkinson, J. (2019, February 19). Standard Costing System: Advantages of Standard Costing. Retrieved January 9, 2020, from https://strategiccfo.com/standard-costing-system/. Hyranya krishna Yalamanchi - Sunday, 12 January 2020, 11:16 PM Execution Analysis Execution assessment is a route for a business to do metal assignment appraisal of how the business is performing. There are various instruments that can be utilized to investigate execution like flexible spending plans and standard expenses. Lets take a gander at these in detail. Flexible Budgets A flexible spending plan is a blueprint of wages and costs in a particular colossal range for different sorts of offers volume made by the affiliation. This spending limits variable expenses from fixed expenses. To make a flexible spending plan there should be a sure number of parts like organized selling cost per unit, variable expenses per unit including thing expenses and variable selling and regulatory costs, the rigid fixed expenses and various sorts of offers inside the huge range. Standard Costs Right when spending plans are readied, the expenses are ordinarily enrolled at two levels, in all out dollars so a pay affirmation can be sorted out, and cost per unit. The expense per uit is suggested as a standard expense (Cliffnotes, 2019). It is generally only a common/assessed cost. Why Managers utilize Flexible Budgets and Standard Costs An adaptable spending plan takes a gander at to the reliable changes of the task. As such, it is astoundingly valuable for budgetary control. It enables us understand the operational substances to pick better choices to control the consuming much more decidedly and confirmation right bit of leeway arranging. Also, standard costs help us with making a typical expense of the undertaking. Thusly getting a standard towards which, we should attempt to hold our adaptable expenses and keep the task inside beyond what many would consider possible. Thusly Managers utilize these expenses to anxiously track and benchmark the entirety of the costs related with an undertaking and use them to consider and refine their system towards future activities. The best procedure to utilize Flexible spending plans and Standard Costs Lets induce a sustenance truck has sustenance prep materials for just 100 individuals and in that specific night 150 or 200 clients appears then by what means will the sustenance truck chief be assessed in such circumstance. In the event that the models were not appropriately considered and emergency outlines were not organized then such conditions could incite a tremendous hardship in deals. Subsequently, setting up a flexible spending that embodies these ussies is basic. References Dandago, K. I., & Adah, A. (2013). The Relevance of Variance Analysis in Managerial Cost Control. Journal of Finance and Investment Analysis, Vol. 2, No. 1, 61-67. Ettlie J.E, Penner-Hahn J.D. Flexibility Ratios and Manufacturing Strategy[M]. Management Science, 1994,40(11) Hughes, M. D. (2017). Performance analysis. London: Taylor & Francis. (n.d.). Retrieved from https://www.cliffsnotes.com/study-guides/accounting/accounting-principlesii/flexible-budgets-and-standard-costs/flexible-budgets. Wilkinson, J. (2018, August 28). Standard Costing Example • The Strategic CFO. Retrieved from https://strategiccfo.com/standard-costing-example/. Arun Thadishetti - Sunday, 12 January 2020, 6:50 PM 1 From chapter 9 it can be clearly affirmed that flexible budget and performance analysis helps to run the organization in a better way and different from other organizations (Garrison, Noreen, Brewer & McGowan, 2010). Each and every manager tries to overcome the challenges and barriers which is faced by the organization. The flexible budget is the budget that adjusts and flexes with the changes in the competitive and rapidly growing market. The flexible budget is the most common and helpful for the organization. So, the economist tries to adopt a flexible budget than the static budget. As, because if there is a static budget adopted by any organization they can face many challenges which may lead the organization to face a recessive phase. Performance analysis is for the most important thing in the organization, which will help the members to grow and which will lead the organization to achieve their desired goals. Each and every organization tries to maintain the report of the performance of the employees which helps the members of rectifying and modify themselves to achieve their goals and as well as organizational goals. From chapter 10 it can be clearly stated that standard cost and variance cost is the most important thing for a firm to run in this competitive market (Ely, 2019). If the financial backbone is not so strapping of an organization it may lead the organization to face a huge loss. Standard cost variance is used to examine and monitor the cost which is incurred by a business. It is the practice of keeping a record of the expected cost and the actual cost which is being incurred while making the budget. It shows and keeps the records and while making the financial report of the year ending and it can be easily highlighted what was the actual budget and what cost was which was added on. Which helps the organization to keep an eye on the expenses and make the organization work in a better way. 2 Flexible budgeting has wide importance in every type of business. Flexible budgeting helps to identify different planned costs from different types of activities. A flexible budget is prepared only after identifying all the expenses required for a company. It signifies the expense which is necessary to achieve a goal for an organization. It helps to make a proper plan of the amount to be used at every level. There are various points which show the importance of flexible budgeting like it provides a comparison between the budgeted payment and actual cost. The flexible budget helps to calculate the operational realities and controls the profit planning. The next point that makes flexible budget more effective in nature is due to the recognition power of the flexible budget (Akcha, Yurdadog & Bozatli, 2019). Flexible budget easily identifies the concept of variability and also provides a proper logical comparison of expenditure with the expenditure which is termed to be as actual. This actual expenditure is mainly named as means of control. A flexible budget is very much beneficial for purposes like budgetary control. This is because it mainly corresponds to the changes that are seen in every level of activities. With the help of a flexible budget, cost ascertainment at many levels of activity is very much possible. 3 Example of a flexible budget is as follows. XYZ is a company that has a budget of dollar 10 million in revenues and a dollar 4 million cost of goods sold. In the 4 million budgeted costs of goods that were sold it was seen that dollar 1 million is totally fixed and dollar 3 million varies with the revenue. Hence, the variable portion of the cost of materials that are sold is 30 percent of revenues. Once there is the completion of the budget period XYZ company sees that the sales were mainly of 9 million. If the company uses the flexible budget then the fixed portion of the cost of the materials which were sold by the XYZ company would still be dollar 1 million but it can be seen that the variable portion would mainly reduce to dollar 2.7 million. As there was 30 percent of revenues always. Hence, the outcome that can be taken in contrast is that flexible budget yields to a budgeted cost of the materials that were sold of dollar 3.7 million at a dollar 9 million cost level. Relatively than the dollar 4 million that could be listed in a static budget. References: Akcha, H., Yurdadog, V., & Bozatli, O. (2019). Un estudio sobre el Enfoque de la Democracia Fiscal y la República de Turquía. Dilemas Contemporáneos: Educación, Política y Valores, 7. Ely, T. L. (2019). Budget Uncertainty and the Quality of Nonprofit Charter School Enrollment Projections. In The Palgrave Handbook of Government Budget Forecasting (pp. 325-344). Palgrave Macmillan, Cham. Garrison, R. H., Noreen, E. W., Brewer, P. C., & McGowan, A. (2010). Managerial accounting. Issues in Accounting Education, 25(4), 792-793. ... Purchase answer to see full attachment