Fixed budget is more useful than a flexible budget

Fixed and flexible budgets are two separate but interconnected parts of a solid accounting regime of a business. Fixed budgets are a good way to keep track of production costs, and motivate the personnel in charge of the purchases to make the best possible effort to obtain the required goods at the lowest possible price. A flexible budget sometimes justifies the entire budget of a company; however, it is better if it is used as part of a broader general budget in a subdivision role, such as a variable expense account.

Budget Should Not Be Regarded As A Master But As A Servant

Explanation of Fixed budget –

A Fixed budget is generally used as a projection tool to estimate business expenses within a stipulated period. The discrepancies that result from the fluctuating cost of raw materials or errors in the initial elaboration of the budget appear in the Fixed budget as variants of the Fixed budget. When accounting for the end of the actual expenses of a production cycle, the variants of the Fixed budget must be combined with the initial real Fixed budget in order to achieve a correct financial report. It can simply help to think of a Fixed budget as a projection budget.

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2 Responses

  1. 2018

    […] Fixed budget is more useful than a flexible budget IGNOUASSIGNMENTGURU निष्पादन बजटिंग में संगठन के निष्पादन (कार्य) के मूल्यांकन में संगठन के विशिष्ट और सामान्य उद्देश्यों दोनों के संदर्भ में मूल्यांकन शामिल है। यह सामान्य रूप से संगठनात्मक उद्देश्यों की क्रिस्टल स्पष्टता और विशेष रूप से, संगठन के एक कर्मचारी द्वारा, उनके स्तर के बावजूद बजट में निर्धारित अल्पकालिक व्यापार उद्देश्यों का अनुमान लगाता है। […]

  2. 2018

    […] Fixed budget is more useful than a flexible budget IGNOUASSIGNMENTGURU […]

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