What is flexible budget answer?
A flexible budget is a tool used in the preparation of financial statements. It allows companies to prepare budgets under different scenarios to be adjusted for future projections.
What is the main purpose of a flexible budget?
A flexible budget is one based on different volumes of sales. A flexible budget flexes the static budget for each anticipated level of production. This flexibility allows management to estimate what the budgeted numbers would look like at various levels of sales.
For which of the following costs is a static budget most appropriate?
For which of the following costs is a static budget most appropriate? Fixed overhead costs.
How is a flexible budget assembled?
How to create a flexible budget
- Identify which costs are variable and which costs are fixed. Fixed costs typically include expenses such as rent and monthly marketing costs.
- Divide the budget.
- Create your budget with set fixed costs.
- Update the budget.
- Input and compare.
Where is flexible budget used?
A flexible budget is useful for manufacturing industries where costs change with a change in activity level. To make accurate budgets, companies must involve experts so that there is less scope for error and variance analysis is improved.
What is flexible budget Mcq?
A budget that will be changed at the end of every month in order to reflect the actual costs of a department.
What are static and flexible budgets?
Static Budget – the budget is prepared for only one level of production volume. Also called a Master budget. Flexible Budget – a summarized budget that can easily be computed for several different production volume levels. Separates variable costs from fixed costs.
What is a flexible budget quizlet?
What is a flexible budget? A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period. -takes into account how changes in activity affect costs.
Is flexible budget dynamic?
The fixed budget doesn’t change as per the fluctuations of business. A fixed budget is always static. A flexible budget is very dynamic.
What is the budget used for?
A budget is a financial plan used to estimate future income and expenses. The budgeting process may be carried out by individuals or by organizations. Budgets help an entity determine whether it can continue to operate with its projected income and expenses.
What type of business uses a flexible budget?
For example, a seasonal business might create a flexible budget that anticipates changing staff levels as customers come and go over the course of the year. Or a company that conducts product development might allow for greater research investment in case of strong sales.
What is the flexible budget amount quizlet?
Who uses a static budget?
Static budgets are used by accountants, finance professionals, and the management teams of companies looking to gauge the financial performance of a company over time.
What is a static budget?
A static budget is a budget that uses predicted amounts for a given period prior to the period beginning. The unique aspect of a static budget is that it does not change regardless of deviations in revenue and expenses.
Which of the following is a difference between a static budget and a flexible budget?
1. What is the primary difference between a static budget and a flexible budget? a) The static budget contains only fixed costs, while the flexible budget contains only variable costs.
Which is features of flexible budget?
A flexible budget is easy to change according to variations of production and sales levels. Flexible budget facilitates performance measurement and evaluation. It takes into account the changes in the volume of activity. Flexible budget replaces a static budget for control.
What is a flexible budget Mcq?
What are the types of budgets?
Different types of budgets
- Master budget. A master budget is an aggregation of lower-level budgets created by the different functional areas in an organization.
- Operating budget.
- Cash budget.
- Financial budget.
- Labor budget.
- Static budget.
- Estimated revenue.
- Fixed cost.