3 Responses for "What are the differences between static budgeting and flexible budgeting?"

1. Serge M August 1st, 2008 at 9:09 am 1

   A static budget is prepared and used throughout the year to compare with actual performance. A flexible budget is prepared early in the year, comparisons are made each month and the budget is adjusted to take into account new information and estimation errors. It is also called a rolling budget. You make a new one every month.

2. very fortunate August 1st, 2008 at 5:02 pm 2

   static is much more to do with a fixed income

3. bekandbri2000 August 3rd, 2008 at 2:46 pm 3

   Static Budget: Shows the expected results of a responsibility center for only one activity level. Once the budget is made, it is not changed, even if the activity level changes.

   Flexible Budget: shows the expected results of a responsibility center for several activity levels.
   The flexible budget is more accurate than the static budget because budget amounts adjust for changes in activity.