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Flexible Budget Research Paper

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Static and flexible budgets are district funds performed in business.The static budgets are prepared at the beginning of the period in which it is a budget does not change, unlike a flexible budget that changes as volume changes. Static budgets are established for a meticulous activity to compare the outcomes with the accounted profits and costs (Grand Canyon University). A flexible budget is made from fixed in which it remain the same except for the variable cost in which it will change the total.
The static budget could be more useful for insurances companies when contractors provide them with an estimate. For instance, a restoration company handles a water loss for one of the policy holder for the insurance. The restoration company will include the remediation, hygienist, and cleaning in their proposal for $5,000. The insurances agree and pay them-them $5,000 and there done with the case. Now, the restoration runs into a problem in which they discovered mold and will have to pay that out a pocket. The static budget is not recommending for a restoration company because they can run into many other problems. If they have a flexible budget, then they make a change work order …show more content…

Budgeting allows investors and banks to know that company is responsible with the money that goes in and out to determine their future. Also, budgeting allows a company to expand or create more businesses. My boss started his business as a mom and pop shop as a cleaning company Last year, he opened the restoration company, and this year he opens the cleaning supplies store and in the next month a window cleaning company. All his business relates to one another, but the overall success of his companies has known how to budget his expenses and profits. By budgeting, it has allowed him to continue investing in other ventures and secure his kids

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