Static Versus Flexible Budget. Static budget versus flexible budget the production supervisor of the machining department for hagerstown company agreed to the following monthly static budget for the upcoming year: The fundamental differences between static and flexible budgets are that a static budget does not change as volume changes whereas a flexible budget changes line values to reflect the level of activity.
Static Budget Vs Flexible Budget Example from askdrlinda.org
A flexible budget is one that is allowed to adjust based on a change in the assumptions used to create the budget during management's planning process. Niland company machining department monthly production budget wages $385,000 utilities 20,000 depreciation 34 With a static budget, you would set spending limits and stick with them throughout the year.
Fixed Budget Is Also Known As Static Budget As It Is Static In Nature, Doesn’t Change At All.
The master budget, and all the budgets included in the master budget, are examples of static budgets. Your flexible budget is the end of period actual accounting of expenses. A static budget can differ from flexible budgeting methods a business might use to track its finances.
Static Budgets Explained A Static Budget Is Generally Used As A Projection Tool For Estimating Business Expenses Within A Given Period Of Time.
A flexible budget is dynamic in nature and changes as per the requirement of the. Static budget versus flexible budget the production supervisor of the machining department for hagerstown company agreed to the following monthly static budget for the upcoming year: A flexible budget is one that is allowed to adjust based on a change in the assumptions used to create the budget during management's planning process.
A Flexible Budget Is A Budget That Adjusts Or Flexes For The Changes In The Activity Level.
A static budget, on the other hand, remains. A flexible budget can sometimes account for an entire company budget; You can use it to make comparisons with the static budget.
Static Budget Versus Flexible Budget The Production Supervisor Of The Machining Department For Niland Company Agreed To The Following Monthly Static Budget For The Upcoming Year:
Niland company machining department monthly production budget wages $385,000 utilities 20,000 depreciation 34 Actual results are compared to the static budget numbers as one means to evaluate company performance. The fixed budget is static and doesn’t change at all.
Hagerstown Company Machining Department Monthly Production Budget $180,000 Wages Utilities 12,000 Depreciation Total 20,000 $212,000 The Actual Amount Spent And.
A flexible budget is designed to change appropriately with the level of activity attained. That means it is the same for any activity level. Unlike in a static budget, which is prepared for a single activity level, a flexible budget is more sophisticated and useful.
