Why are variances calculated on the flexed budget, rather than the original budget?

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belle_anna
belle_anna Registered Posts: 1
I know how to work out the flexed budget and the variance I just don’t know why we actually need to do it??

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  • badhombre
    badhombre Registered Posts: 20
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    because the flexed budget allows a direct comparison with the actual revenue/ costs whereas the static budget was drafted on a hypothetical vol of product produced (in a manufacturing context)
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