Purchase Solution

Flexible Budgets

Not what you're looking for?

Ask Custom Question

Explain the relationship between fixed and variable costs used in a flexible budget.
Discuss the differences between static and flexible budgets and how a flexible budget lends itself to a cost-volume-profit analysis.

Purchase this Solution

Solution Summary

Your response is 322 words answering the three questions and then giving you a sample static and flexible budget so you see how this works.

Solution Preview

A flexible budget adjusts the beginning of the year budget (static budget) to the actual activity levels. The only items that are adjusted are variable costs because they are the only ones that are "sensitive" to activity!

Static budgets are the beginning of the year budgets and are created based on expected activity levels. The flexible budget is the static budget "updated" for the actual activity level that occurred during the period.

A flexible budget lends itself to CVP analysis because it separates the variable from the fixed costs, permitting the ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.