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Modul Akuntansi Manajemen [TM12]

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    MODUL PERKULIAHAN Flexible udget Flexible budget & Variable overhead variance Fakultas Program Studi Tatap Muka Kode MK Disusun Oleh Economic & Business Accountancy Kode MK Alfiandri MAcc Abstract Kompetensi Diisi dengan abstract Diisi dengan kompetensi  2012 2 Managerial Accounting Pusat Bahan Ajar dan eLearning  Alfiandri, MAcc http://www.mercubuana.ac.id Pembahasan 1. Introduction Budgeting involves a lot of time and effort and the results of the budgeting process should not be shoved into a filing cabinet and forgotten. To be useful, budgets should provide guidance in conducting actual operations and should be part of the performance evaluation process. However, managers need to be very careful about how budgets are used. In the government sector, budgets often establish how much will be spent, and indeed, spending more than was budgeted may be a criminal offense. However, that is not be applied in the organization. Mostly actual spending will rarely be the same as the spending that was budgeted at the beginning of the period. This is because the actual level of activity (such as unit sales) will rarely be the same as the budgeted activity, therefore, many actual costs and revenues will naturally differ from what was budgeted 2. Characteristic of Flexible Budget  A planning budget   is prepared before the period begins and is valid for only the planned level of activity. A static planning budget is suitable for planning but does not suit for evaluate to control the costs. If the actual level of activity differs from what was planned, it would be misleading to compare actual costs to the static, unchanged planning budget. If activity is higher than expected, variable costs should be higher than expected and vice versa. In order to evaluate and control the costs, flexible budget is applied. Flexible budget   is an estimate of what revenues and costs should have been, given the actual level of activity for the period. When a flexible budget is used in performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget. Flexible budgets take into account how changes in activity affect costs. This is a very important distinction. If adjustments for the level of activity are not made, it is very difficult to interpret discrepancies between budgeted and actual costs.  2012 3 Managerial Accounting Pusat Bahan Ajar dan eLearning  Alfiandri, MAcc http://www.mercubuana.ac.id 3. Deficiencies of the static planning budget To illustrate the difference between a static planning budget and a flexible budget, it is better to have the example. Rick’s H airstyling, an upscale hairstyling salon located in Beverly Hills that is owned and managed by Rick Manzi. The salon has very loyal customers. He is currently concerned to control cost and revenue of his business. He hires a business adviser, Victoria Kho. He is independent accounting who expert in the small business.  At the end of February, Ricky prepare budget for March, He believes that the number of customers served in a month is the best way to measure the overall level of activity in his business salon. Take a note that term of revenue is used for planning budget purposes not in real sales. Furthermore, he determine the cost into 8 categories e.g., wages and salaries, hairstyling supplies, client gratuities, electricity, rent, liability insurance, employee health insurance, and miscellaneous. Client gratuities consist of flowers, candies, and glasses of champagne that Rick gives to his customers while they are in the salon Figure 1 Planning Budget  2012 4 Managerial Accounting Pusat Bahan Ajar dan eLearning  Alfiandri, MAcc http://www.mercubuana.ac.id Work altogether with his accountant, Ricky has estimated cost formula for each cost. For example, cost of electricity. These costs should be $ 1500 + $0.10q where q equal the number of client visits. In other words, electricity is a mixed cost with a $1,500 fixed element and a $0.10 per client-visit variable element. Once the budgeted level of activity was set at 1000 client-visits, it was easy to compute the budgeted amount for each line item in the budget. The budget for electricity was set at $ 1.600 ($1.500 + $0.10 x 1000).  At the end of the March, Rick found that his actual profit was $ 21.230. It is important to realize that the actual results are not   determined by plugging the actual number of client-visits into the revenue and cost formulas. The formulas are simply estimates of what the revenues and costs should be for a given level of activity. What actually happens usually differs from what is supposed to happen. Figure 2  –  Actual Results  –  Income Statement If compare between planning budget with actual results then the results is good because net operating income increase from $ 16.800 to $ 21.230. However, increase net income that 10%
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