Budget analysis meeting of

Account Ants company

Presented by: Account Ants

Md. Tanzim Ahmed 12007002 CEO

Shakhawat Hossain 12007015 Marketing Manager
Din Islam 12007021 Production Manager
Sanjana Binte Islam 12007035 Head of Sales
Jonayed Hossain 12007041 Head of Distribution
Mohammad Sharif 12007048 Financial Manager
Agenda of Budget Analysis Meeting

Topic Start Time End Time

Welcome remarks 1:00 pm 1:02 pm

Review issues from last 1:02 pm 1:04 pm

meeting

Budget analysis 1:04 pm 1:16 pm

Schedule of next meeting 1:16 pm 1:17 pm

Closing remarks 1:17 pm 1:18 pm

Flexible Budget VS Static Budget

Static Budget Flexible Budget

 A Predetermined Estimate of income and  A flexible statement of income and

expenditure expenditure
 There will be no changes in future  Designed to change according to needs
 No degree of adaptability  Dynamic in nature
 Easy to prepare  Highly sophisticated
 Take less time to prepare  Take more time to prepare
 Less effective as change is the only constant  More effective due to its adaptive nature
Advantages of Static Budget

Easy to Implement

It serves as a guide of the Company

A cash flow planning tool for companies.

Disadvantages of Static Budget

Lack of flexibility

Sometimes Harms Companies Profit

Not Suitable for new Company

Characteristics of flexible budget

1. Wide Range

2. Flexibility

3. Performance Evaluation

4. Changes
Characteristics of flexible budget

5. Replace Of Static Budge

6. Easy to control 

7. Particular period of time

8. Prepared in advance
Advantages of Flexible Budget

Adjustments based on profit margins

and costs

Updated With Current Data

Usage in variable cost environment

Potential to maximize revenue

Advantages of Flexible Budget

Take Advantages of Opportunities

Budgeting efficiency

Increased cost controls

Performance measurement
Preparation of a flexible budget

STEP-1: Identify which costs STEP-2 : Divide the budget

are variable and which costs are
fixed
Preparation of a flexible budget

STEP-3: Create budget with set fixed costs

STEP-4 : Update the budget

STEP-5 : Input and compare

Variance Analysis

In Managerial Accounting, A Variance is the difference between a forecasted

amount and the actual amount .Variances are common in budgeting a variance
is the difference between a budgeted Planned or standard cost and the actual
amount incurred or sold.
Types of Variance :
• Material Variance
• Labor Variance
• Overhead Variance
 Variance Formula

Variance = Forecast-Actual

Favorable variance example:

Let, our prediction was spend would be 1000 hours on a project.
Instead, we spent only 500 hours on the project.

Variance =Forecast –Actual

Variance =1000-500 taka
=500 taka
So, favorable variance is 500

And What is this amount as a Percentage ?

Variance =(Actual/Forecast)-1×100
Variance=(500/1000)-1×100
Variance is -50%
 Variance Formula

Variance = Forecast-Actual

Unfavorable variance example:

Let, our spend would be 5000 taka on inventory. But there is a supply shortage
that drives up the costs to 7000 taka.
Variance = Forecast –Actual
= 5000 – 7000
= -2000 taka
So, unfavorable variance is -2000 taka

And What is this amount as a Percentage ?

Variance =(Actual/Forecast)-1×100
Variance=(7000/5000)-1×100
Variance is 40%
This is the end of our meeting
Thank You All