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    Budget more useful: flexible or static?

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    Which budget type do you think is more useful: flexible or static? Which one should companies use?

    Why is benchmarking useful? Do you use benchmarking in personal life?

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    Solution Preview

    I think flexible budgets are more useful because they indicate what you should have spent given the activity that occurred. I would not be impressed if the accounting manager was under budget by 10% but the reduction in force means that there were half as many plants and employees to serve than initially expected when the budget was created! A flexible budget re-sizes the variable portion of the budget to what you should have spent given the level of activity. ...

    Solution Summary

    Which budget types, either flexible or static, is the most useful is determined. Benchmarking is defined.