Flexible Budgets

whippy Bud modernises September 12, 2011 Fred Johnston Flexible Budgets Organizations rely on work outs as tools to plan for upcoming revenues and expenses. Budgets are priceless when planning for a successful future, but contrary luck can surface that may change the direction of the brass instruments pecuniary data. One budgeting technique that helps plan for uncertainties and fluctuations is attach budgeting. The next several(prenominal) paragraphs analyze tensile budgets through a interchange of in ductile and variable cost, the major(ip) differences between static and limber budgets, and how flexible budgets assist in a cost- ledger-profit (CVP) analysis. unchanging and Flexible Budgets A static budget is based upon a notice train of legal action, and is generally prepared prior to the start of the chronicle power point: in other words, it is the original budget. Static budgets do non consider data for varied levels of activi ties, and as such these budgets do not change. The results of static budgets are compared against standard positive financial figures. Static budgets are also known as r separately budgets, serving as control budgets that do not part even if the actual volume of activity differs from the planned volume.  A flexible budget is an extension of the assure budget.

The flexible budget is a tool to evaluate process: activity statistics may be reviewed, and then forecasted budgeted numbers may be correct accordingly. This type of budget is basically undisturbed of a serial publication of static budgets at different levels of activity, and can change! each time the budget is prepared. The major difference in a flexible budget, as compared to a static budget, is the data that is coordinated: flexible budgets display revenues and costs over different volume levels, rather than one unending level. For reference, see Appendix A, which represents a sample static and flexible budget: the static budget remains constant, while the flexible budget incorporates variances to the...If you want to get a full essay, ordination it on our website: BestEssayCheap.com

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