Saturday, 6 August 2011

Flexible Budgets and Static Budgets

Flexible Budgets

the tools used by most of the companies to control overhead costs.

not based on only one level of activity.

a detailed plan for controlling overhead costs.

Static Budgets

based on a particular planned level of activity.

Static budgets are prepared for a single, planned level of activity. Performance evaluation for overhead is difficult when actual activity differs from the planned level of activity.

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