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Group, both static and flexible budgets are key to helping us in various ways. While static budgets are very limited in their flexibility (no pun intended), they offer a wide range of planning and forecasting benefits, especially as you pointed out, to upper levels of the company. Flexible budgets, on the other hand, are a great tool when we want to play a game of “what if”. Well, not a game, but certainly in the decision making process. :0) I’ve used these extensively, especially when making decisions about increasing or decreasing production, moving a product line in/out of a business, changing product costs, etc, etc.
Group, what other advantages and disadvantages do each of these tools offer?
Static and Flexible BudgetsStatic budgets advantages- They are easy to follow and implement since they don’t need continuous updates.When variance analysis is done they offer show insights…
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