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    Fixed and Flexible Budget

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    Compare bottom-line financial results of using a fixed budget and a flexible budget if volumes (a) increase by 10% or (b) decrease by 10%.

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    The bottom line financial results will vary considerably if we use a fixed budget rather than a flexible budget.

    (a) If the volume increased by 10%, then the fixed budget would show a negative variance. This is because all there will be an increase in variable costs associated ...

    Solution Summary

    The solution explains the concepts briefly and concisely. The answer is to the point and can easily be understood by a student with a basic understanding of the topic. Overall, an excellent response.