Boland Manufacturing prepared a 2013 budget for 120,000 units of product.Actual production in 2013 was 130,000 units.To be most useful, what amounts should a performance report for this company compare?
A)The actual results for 130,000 units with the original budget for 120,000 units.
B)The actual results for 130,000 units with a new budget for 130,000 units.
C)The actual results for 130,000 units with last year's actual results for 134,000 units.
D)It doesn't matter.All of these choices are equally useful.

Question

Quizplus · Accepted Answer

A performance report should compare the actual results with a flexible budget that reflects the actual level of activity, which in this case is 130,000 units. This allows for a more accurate assessment of performance by considering the actual production volume.

Boland Manufacturing Prepared a 2013 Budget for 120,000 Units of Product.Actual