Planning budget it is also known as static budget. A planning budget is created at the beginning of the budgeting period, using the budgeted level of activity for the period and the budgeted rates of revenue and cost per unit of the activity.
Flexible budget: It is a report showing estimates of what revenues and costs should have been according to the standards for the actual level of activity for the period.
Planning,
1 Budget
2 | Cars washed 9,000
3 Revenue 44,100
4 | Expenses
5 __ Cleaning supplies
6 Electricity
7 Maintenance
8 | Wages and Salaries
9 Depreciation
10 Rent
11 Administrative expenses
12 Total expense
13 | Net operating income
Activity variance: Activity variance is defined as the difference between the amounts reported for an item of revenue or expense in the planning budget and the flexible budget. These variances are caused solely due to the difference between the level of activity budgeted at the beginning of period and the actual level of activity achieved during the period.
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