What forms the basis for analyzing the differences between planned and actual results?
A)comparing actual results achieved with the master budget,only.
B)comparing actual results with the flexible and master budgets.
C)comparing actual results with the normal or average budget for the industry.
D)comparing actual results achieved with the actual results of the prior years.

Question

Quizplus · Accepted Answer

Comparing actual results with both the flexible and master budgets allows for a more comprehensive understanding of the differences between planned and actual results. The flexible budget takes into account changes in activity level, while the master budget provides a standard for comparison. Comparing only with the master budget (choice A) may not reflect changes in activity level, while comparing with the industry normal or average budget (choice C) may not be relevant to the specific company. Comparing with prior year results (choice D) may not reflect changes in the current environment or business operations.

What Forms the Basis for Analyzing the Differences Between Planned