Asked Dec 24, 2019

What is a static budget? Explain? Give example?


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Static Budget: Static budget is an outcome of fixed budgeting process. It includes the fixed estimates for a period when changes are not allowed during the period. Static budget is used to find the variance in actual and estimated values. Static budget is also called as fixed budget. A static budget is a budget that is prepared for a particular level of activity and remains same for the whole fiscal year. A static budget performance report shows the performance of a company as favorable or unfavorable by comparing the actual results with the budgeted figures during a particular period of time. Nature of Static budget differences It is prepared for only one level of sales volume. Preparation Time of preparation It is prepared before the start of the period. Cost determination In any conditions, static budgets are not altered. It has only limited applications. Assumption It helps the management to spend within their limits. Use


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