Costing: Flexed Budgets

Hello AAT forum!

I am having problems calculating the overheads within a flexed budget and I hope someone could help put my mind to rest. The usual Costing question shows a table with rows showing units sold, sales revenue, direct costs, fixed overheads and profit from operations and these amounts filled in for two columns titled original budget and actual. My job is to fill in the flexed budget column in the middle - so using the percentage difference between original budget: units sold and the actual: units sold I can calculate the variance for all the rows (and the resulting adverse or favourable variance), apart from the overheads.

Some questions state fixed overheads and the answers show an unchanged figure in the flexed budget and some say fixed overheads that have a change in the flexed budget.

This problem is clear to see in Management Accounting: Costing page 208, Question 7.8, which shows no change for fixed overheads in the flexed budget and the following question 7.9 shows that there is a change. Both questions say fixed overheads. Answers on pg 309.

Any advice would be greatly appreciated!


P.S. Can tables be copied into the comments without losing format?


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