Consider the following terms:
a. Flexible Budget
b. Flexible Budget Variance
c. Sales Volume Variance
d. Static Budget
e. Variance
Consider the following definitions:
____1. A summarized budget for several levels of volume that separates variable costs from fixed costs.
____2. The budget prepared for only one level of sales volume.
____3. The difference between an actual amount and the budget.
____4. The difference arising because the company actually earned more or less revenue, or incurred more or less cost, than expected for the actual level of output.
____5. The difference arising only because the number of units actually sold differs from the static budget units.
Requirement
1. Match each term to the correct definition.