What is fixed budget with example?
Example of Fixed Budget If the company prepares a fixed budget and it is projecting sales of $1 million, the budget for sales commissions will be fixed at $50,000. If the actual sales end up being only $900,000 the budget for sales commissions will remain unchanged at the fixed amount of $50,000.Click to see full…
Example of Fixed Budget If the company prepares a fixed budget and it is projecting sales of $1 million, the budget for sales commissions will be fixed at $50,000. If the actual sales end up being only $900,000 the budget for sales commissions will remain unchanged at the fixed amount of $50,000.Click to see full answer. Then, what is flexible budget example?Definition and example. A flexible budget is a budget or financial plan that varies according to the company’s needs. Flexible budgets calculate, for example, different levels of expenditure for variable costs. These levels vary depending on the changes in revenue.Subsequently, question is, why flexible budget is better than fixed budget? Fixed budget has a limited application and is inefficient as a tool for cost control. Flexible budget has more application and can be used as a tool for cost control. If the budgeted and actual activity levels vary, the correct ascertainment os coasts and fixation of prices becomes difficult. Beside above, what are fixed and flexible budgets? A fixed budget is a budget that doesn’t change due to any change in activity level or output level. The flexible budget is a budget that changes as per the activity level or production of units. The fixed budget is static and doesn’t change at all. A fixed budget is always fixed.What are three types of flexible expenses? Here is a list of categories to include in your fixed expenses: Mortgage(s) Rent. Property taxes (if paying monthly) Strata fee / condo fee. House / tenant insurance. Utility bills (cable, cell, electricity, water, etc.) Lease / car loan payment. Vehicle insurance (if paying monthly)
