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Flexible budgets for performance evaluation

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Why is the flexible budget appropriate for evaluation of performance? Is there any reason why a company should prepare a static budget since its poorly suited for evaluating performance?

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The solution examines flexible budgets for performance evaluation.

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The static Budget is used for one level of activity. This type of budget works well for evaluating performance. They work so well because the planned level of activity is equal to the actual level of activity. In other words, what you plan for and the actual results equal. This budget helps determine if cost was ...

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