What budgeted amounts appear on the flexible budget? Actual costs for the budgeted activity level. Actual costs for the estimated activity level. Original budgeted amounts at the static budget activity level.
What is the flexible budget amount?
To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume. Here, the figure indicates that the variable costs of producing 125,000 should total $162,500 (125,000 units x $1.30).
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.
What is included in a flexible budget?
A flexible budget adjusts to changes in actual revenue levels. Actual revenues or other activity measures are entered into the flexible budget once an accounting period has been completed, and it generates a budget that is specific to the inputs. The budget is then compared to actual expenses for control purposes.
What is the primary difference between a static budget and a flexible budget?
the static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. Explanation: The static budget is prepared with only one single level of activity. The flexible budget can be adjusted for different level of activities.
What is a static budget appropriate for?
The static budget is intended to be fixed and unchanging for the duration of the period, regardless of fluctuations that may affect outcomes. When using a static budget, some managers use it as a target for expenses, costs, and revenue while others use a static budget to forecast the company’s numbers.
Why would you prepare a flexible budget?
Budgeting efficiency. Flexible budgeting can be used to more easily update a budget for which revenue or other activity figures have not yet been finalized. Under this approach, managers give their approval for all fixed expenses, as well as variable expenses as a proportion of revenues or other activity measures.
What is another name for static budget?
Terms in this set (15) Static budget is another name for: Fixed budget. Variable budget is another name for: Flexible budget.
When should flexible budget be used?
Flexible budgeting can be used to more easily update a budget for which revenue or other activity figures have not yet been finalized. Under this approach, managers give their approval for all fixed expenses, as well as variable expenses as a proportion of revenues or other activity measures.
Which of the following is a difference between a static and a flexible budget?
The primary difference between a static budget and a flexible budget is that: the static budget contains only fixed costs, while the flexible budget contains only variable costs. b. the static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.
What does a static budget look like?
A static budget incorporates expected values about inputs and outputs that are conceived prior to the start of a period. A static budget forecasts revenue and expenses over a specific period but remains unchanged even with changes in business activity.
Is the master budget static?
Furthermore, a company’s master budget may also include a record of its static budgets during the financial periods the business has been in operation. The key difference of the static budget is that it remains fixed throughout changes in cash flow, expenses and other financial aspects of a company’s budget.
