A flexible budget can sometimes account for an entire company budget however, it is best used as part of a larger overall budget in a subsection role, such as a variable expense account static budgets explained. What are the advantages of using a flexible budget vs a static budget flexible budgets are more capable of adapting to changing conditions in the marketplace more responsive way than the . A flexible budget is a series of static budgets at different levels of activity ann should know that the following conditions contribute to the effective use of .
A flexible budget is a budget that adjusts or flexes for changes in the volume of activity the flexible budget is more sophisticated and useful than a static budget, which remains at one amount regardless of the volume of activity assume that a manufacturer determines that its cost of electricity . But no matter whether it is used for planning or for control, a budget is more than a forecast a forecast is a prediction of what may happen and sometimes contains prescriptions for dealing with . Under what conditions is a flexible budget likely to be more effective than a forecast budget - answered by a verified tutor. Control: under the system of budgetary control budget forecast is thoroughly discussed and reviewed to be finally approved as functional begets afterwards a lot of cuts and adjustment are made to .
Flexible budget is adaptable to changes in operating conditions (d) performance budget : a performance budget is an input-output budget or costs and results budget. Under what conditions is a flexible budget more effective than a forecast budget â 300 words with reference 2â how does understanding how costs behave assist you in managing a hospital under the medicare prospective payment system 300 words with reference. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods in other terms, a budget is an organizational plan stated in monetary terms. Under what conditions is a flexible budget more effective than a forecast budget question 4 the concept of forecast and flexible budgets can be difficult to grasp initially.
The behavioral literature on budgeting supports the view that the budget should reflect what is most likely to occur under efficient operating conditions if a budget is to be used as an effective planning and monitoring device, it should encourage a high level of performance and efficiency, but at the same time, it should be fair and obtainable. As a result, a variance greater than zero spending is over budget while a negative figure means spending is under budget secondly, note that some people instead show variance as the budget value less the actual figure . Under what conditions is a flexible budget likely to be more effective than a forecast budget two conditions are necessarily for a flexible budget to be more useful than a forecast budget first, there must be some indication that costs are variable, at least in part. Under what conditions is a flexible budget more effective than a forecast budget apart from helping you to track down your expenses, budgeting also helps you to realize and attain your long and short term financial goals.
One of the benefits of flexible budgeting is that it helps changes in conditions: senior managers may have preferred that the company had spent more for . The year-end forecast/projection is usually a better reference than the original in building the following year's budget accrual vs cash accrual accounting - and budgeting - matches income and related expenses in the same fiscal period, regardless of the timing of the receipt or disbursement of actual cash. Under what conditions is a flexible budget likely to be more effective than a forecast budget discussion 2 read chapter 13 and in 300-350 words, answer the following questions:.
What are the roles played by a budget and how many budget types are available under what conditions is a flexible budget likely to be more effective than a forecast understanding flexible budgets. For more information, please [email protected] use team work to plan and implement if it is to be effective the budget sets perimeters for management . 5 approaches to effective budgeting and forecasting in healthcare / 2 • flexible budget • rate/volume more than one baseline set of.