A flexible budget is one that can be altered in response to modifications made to the underlying assumptions used to develop it during management’s planning process. In contrast, a static budget stays the same even if there are significant deviations from the planning assumptions. The ability to adapt is a flexible budget’s biggest advantage over […]
What Is A Flexible Budget? Definition & How To Create It
First, what is a flexible budget? A flexible budget is a budget that adjusts to the activity or volume levels of a company. A flexible budget continuously “flexes” with a business’s variations in costs, as opposed to a static budget, which stays with the amounts decided upon when the budget was created. Please continue reading […]
What Is A Static Budget? Basic Definition & Meaning
First, what is a static budget? A static budget is a budget that uses predicted amounts for a given period prior to the period beginning. Static budgets are distinct in that they remain constant despite variations in income and outlays. Please continue reading so I can provide you with more specific information about what a […]
What Is A Budget Variance? A Complete Description
Budgeting is a standard part of the business of all sizes and types of organizations. But most financial experts know that budgeting and strict budget implementation are two different things. What is budget variance? In everyone’s life, there must be some budget differences – the difference between actual expenditure and budget amount. Human errors, changing […]