For this year, I prepared the budget for 100,000 units of product. The actual production was 115,000. What amount should I use To create a performance report for the company to compare

To create a performance report, you should use a *flexed budget* for 115,000 units instead of the original budget for 100,000 units. A flexed budget adjusts your original budget to match the actual production level, allowing you to fairly compare what the costs and revenues *should have been* at the higher production level. 

Here’s how to approach it:

1. **Determine the cost behavior**: Identify which costs are fixed and which are variable. Variable costs should increase proportionally with production, while fixed costs remain the same regardless of production level.

2. **Calculate variable costs for 115,000 units**: Adjust the variable components of your budget (like materials, labor, and other costs that change with production volume) proportionally from the original 100,000 units to 115,000 units.

3. **Keep fixed costs constant**: Fixed costs (such as rent, salaries of administrative staff, and other overheads that don’t change with production) will remain the same as in the original budget.

4. **Flexed budget total**: Combine the recalculated variable costs and the unchanged fixed costs to create the flexed budget for 115,000 units.

This flexed budget provides a realistic benchmark to assess performance against actual spending, helping you identify areas of overspending or cost-saving more accurately.

Would you like to see an example calculation?

### Related Questions
1. What are the main differences between a static budget and a flexed budget?
2. How do you calculate the variable cost per unit?
3. Why is it important to separate fixed and variable costs in budgeting?
4. What would happen if we used the original 100,000-unit budget to assess performance?
5. How can analyzing variances between flexed budget and actuals improve company performance?

### Tip
Always break down mixed costs (costs that have both fixed and variable components) to increase accuracy in flexed budgeting.

For this year, I prepared the budget for 100,000 units of product. The actual production was 115,000. What amount should I use to create a performance report for the company to compare?

Learn to adjust budgets based on actual production with flexible budgeting. Discover how to compare performance for an initial budget of 100,000 units with an actual production of 115,000 units, applying cost behavior analysis to enhance accuracy.

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