A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Choice "a" is incorrect. The debtor is expected to pay a minimum amount each month, with that amount determined by the lender, not the debtor. Depending on your situation, some expenses (for example, long distance calls or a cell phone) may be considered flexible rather than fixed expenses. Consumer discretionary is an economic sector comprising non-essential products that individuals may only purchase when they have excess cash. A monthly budget that is changed to reflect the number of days in the month. Higher interest rates results in higher costs of borrowing money. Flexible budget variance is the difference between the: A. flexible budget and static budget due to differences in fixed costs. Some debts involve a combination of fixed and flexible expenses. Both flexible and static budgets can be … Both flexible and static budgets include both variable and fixed costs. variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, Health Flexible Spending Arrangements (FSAs) carryover amount. Revenues and expenses for changes in output (such as sales volume). Amazon Doesn't Want You to Know About This Plugin. Choice "b" is incorrect. A static planning budget is suitable for planning but not for evaluating performance. Even inflexible expenses can contain flexible components. The consumer may "cut the cord" and use an à la carte, Internet-based streaming service for a lower monthly cost than the bundled packages offered by satellite and cable companies. Expenses not paid until the following year. B. expected results in the flexible budget for the units expected to be sold and the static budget. Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis. False. 7. A budget that shows variable production costs only. There is no option of reducing or otherwise changing the amount of that month when and as desired, since the terms of the agreement governing the transaction do not allow for that type of activity. Flexible budget costs and static budget costs B. B.) After many years in the teleconferencing industry, Michael decided to embrace his passion for In short, the flexible budget is a more useful tool when measuring a manager's efficiency. List your flexible expenditures. They can only be used for dependent-care expenses. Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. variable expense. actual costs are compared with the expected costs at the same level of activity. How can I Plan a Birthday Party on a Budget. _____ are costs incurred for the acquisition of short-run activity capacity, usually as the result of yearly planning. False. This little known plugin reveals the answer. Wikibuy Review: A Free Tool That Saves You Time and Money, 15 Creative Ways to Save Money That Actually Work, Flexible Spending Account Medical Expenses. A flexible expense is a discretionary purchase that can be altered or eliminated altogether without a significant downside. Discretionary fixed expenses B. C. They work best to the extent that employees have unpredictable expenses. Question: Which Of The Following Is True When A Company Determines That Its Costs Should Be Explained By More Than One Cost Driver? For example, food is considered an essential expense in the household budget. line Graph. Example of Flexible Budgets. This is true with many credit card accounts. Which of the following is true of a flexible budget? pie chart. The Flexible Budget Performance Report Should Be Prepared Using Only A Single Cost Driver. Revenues for sales-dollar changes. Price variance refers to a difference between budgeted price per unit and the actual price per unit. bar Graph. All of the following are limitations of short-term financial performance indicators except: D.Senior managers typically find non-financial performance indicators more useful than summary financial-performance indicators. Even the cost of utilities such as electricity may be considered a flexible expense. O A static budget can be used to measure performance and to identify discrepancies between budgeted and actual costs. B. Experian. D. TransUnion. Actual costs and flexible budget costs C. Departmental costs and cost center costs D. Flexible budget costs and original budget costs It compares the actual costs with the budgeted costs for the budgeted level of activity. $2,000 favorable. A company anticipates selling $200,000 of goods, of which $15,000 will probably be uncollectible. Sample Budget WorksheetThe following budget is broken down into the following types of expenditures: 3 Fixed Expenses, Periodic Fixed Expenses, Flexible Expenses and Indebtedness. A vacation or a new bicycle would be examples. It is important to pay the same amount each month in order to be considered current with the debt. The expense may be reduced by opting for a plan with fewer premium channels. Fixed budgets and static budgets are syFalsenymous terms. Understanding what does and does not constitute a fixed cost or expense … 42. What would be the utility expenses on the company's flexible budget if actual unit sales for April were 6,000 units? A.) User: Each of the following is an example of a flexible expense EXCEPT: A. food B. clothing C. insurance D. entertainment Weegy: Option D: ENTERTAINMENT is not an example of flexible expense. But most consumers make less budget-busting decisions every day: whether to buy the generic or name-brand aspirin; whether to go out for coffee or make it at home; whether to join a health club or run in the park. A. B. Turning off unused lights and appliances, using less powerful light bulbs, and hanging laundry out to dry instead of using a dryer are ways to reduce power consumption and household costs. Its annual master budget reflects an indirect labor costs, a variable cost, of P360,000 based on an annual production of 200,000 units. Adverse selection of benefits by employees results in increase in costs. Learn about a little known plugin that tells you if you're getting the best price on Amazon. Which of the following statements about static and flexible budgets is not true? 4. Knowing where the money is going, and separating the flexible from the inflexible, can help people cope with a budget that is stretched to the limit or beyond. Many corporation expenses as well as individual expenses are actually flexible in nature, in that there are ways to manipulate the amount of the expense and still remain within a balanced budget. controllable difference. In addition to recurring expenses, there also are periodic expenses. One example of a household fixed expense is the monthly mortgage or rent payment. This is not the rule for determining whether an expense can be reimbursed by a flexible spending arrangement (FSA). A consumer can buy a leather handbag for $20 at a warehouse store or spend $40,000 to $50,000 on a single Hermes Birkin bag. devotional anthologies, and several newspapers. It is possible, however, to adjust the amount of resources that are devoted to food consumption for the weekly or monthly budget. It compares the actual costs with the budgeted costs … The contemporary consumer seems to be faced with an extraordinary range of goods and services that are available at prices from discount to super-premium. Which of the following is NOT a disadvantage of flexible benefit programs? Which of the following BEST describes a flexible budget? Economists often use the term consumer discretionary spending to describe flexible expenses. Or, the truly budget-conscious can buy an inexpensive digital antenna and watch broadcast television for free. league baseball, and cycling. Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. D. Historical costs and standard costs are synoymous terms E. Fixed budget and standard budget are synonymous terms A quantity variance refers to a difference between budgeted quantity and the actual quantity used. Do you wonder where all your money is going? True. Flexible Spending Account - FSA: A Flexible Spending Account (FSA) is a type of savings account available in the United States that provides the account holder with … C. actual results and the expected results in the flexible … a. a flexible budget can be used to determine what costs should have been at a given level of activity b. if activity is higher than expected, total variable costs should be higher than expected. Entertainment costs can usually be broken down further into categories such as a cable television subscription, music downloads, and evenings out. This includes information on eligible expenses, the savings calculator, claim forms and more. A flexible expenses and a periodic expense are basically the same thing. The cost of living is the amount a person needs to spend to cover basic expenses such as housing, food, taxes, and healthcare in a particular place. A flexible budget variance for a manufacturing cost is computed as the difference between: A. C. Expenses for changes in budgeted output between two periods. Question 7 options: Wealth is not accumulated. A personal spending plan, similar to a budget, helps outline where income is earned and expenses are incurred. Which of the following is an example of a discretionary fixed expense? Various articles of clothing are examples of flexible expenses. The consumer has the option of purchasing garments that are available at a discount, or buying similar items that are sold at full price. Question 7 (4 points) When savings is considered a flexible expense, what typically happens? Investopedia uses cookies to provide you with a great user experience. One significant disadvantage to using an FSA is that funds not used by the end of the plan year are forfeited to the employer, known as the "use it or lose it" rule. For example, if a household elects to order a cable or satellite television service, the cost recurs monthly. E. 6. Somewhere in between probably works for the budgets of most people. It's the filet mignon in the grocery budget. Most consumers know what they should do if they need to keep their expenses down. Which of the following statements is true about flexible spending accounts? #40 which of the following statement is false? C. Total fixed costs will be the same for a flexible budget and a master budget.. But it can be helpful to list all of one's flexible and inflexible expenses in order to really understand where all the money is going. trivia, research, and writing by becoming a full-time freelance writer. The decision-making process starts with gathering information. At each point in the process, the control is in the hands of the consumer, who can decide how and when to proceed with the transaction, controlling the amount of money spent in order to acquire a desirable or necessary item. This example has the following details provided by a factory expected to operate at 70% level of activity (i.e., 14000 hrs)-Now, between 85% and 95% of activity level, its semi-variable expenses increase by 10%, and above 95% of activity level, they grow by 20%. They restrict pretax employee contributions. 4. The flexible budget rearranges the master budget to reflect this new number, making all the appropriate adjustments to sales and expenses based on the unexpected change in volume. The flexible-budget variance for materials is: A. Malcolm’s other interests include collecting vinyl records, minor TRUE or FALSE. This is in contrast to fixed expenses, where there is no control over the amount of the expense. The company pays a monthly rent of $2,000. In personal budgeting, a flexible expense is one that can be cut back or eliminated. Question 6 options: histogram. Which one of the following uses your credit history to determine your credit score? Monthly utility expenses are estimated to be $2,000 plus $2 per unit, whereas selling expenses are estimated to be $12,000. A flexible spending arrangement (FSA) is a form of cafeteria plan benefit, funded by salary reduction, that reimburses employees for expenses incurred for certain qualified benefits. flexible budget variance. The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called responsibility accounting . menu costs. A discretionary expense is a cost that is not essential for the operation of a home or a business. It is important to note that flexible expenses may or may not be connected with necessities. Since then, he has contributed articles to a The debtor can choose to set aside funds to pay a figure above and beyond that required minimum payment. To an economist, flexible expenses are consumer discretionary spending items. B. For costs that vary with volume or activity, the flexible budget will flex because the budget will include a variable rate per unit of activity instead of one fixed total amount. The "flexible budget" can best be described as a budget that adjusts: A. A flexible budget is better than a static budget for performance evaluation since it can be adjusted to the actual production level. D. "For … Commonly considered a flexible expense. Should some unanticipated circumstance occur, the debtor can still keep the credit card account current by making the minimum payment due, while diverting the addition sum set aside to help manage the emergency. C. FICO. 50. Financially security is not being built An FSA may be offered for dependent care assistance, adoption assistance, and medical care reimbursements. Many corporation expenses as well as individual expenses are actually flexible in nature, in that there are ways to manipulate the amount of the expense and still remain within a balanced budget. A. Equifax. Administrative burdens and expenses increase. If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, while wages remained at w0 and prices remained at P0, what will be the result? Save. All that is required to manage or control the cost of food is careful planning when it comes to grocery shopping, along with eliminating the number of times during the period that meals are eaten in a restaurant or ordered as takeout items. A flexible expense may be recurring, although the amount spent and the decision to incur the expense are still matters of choice. Is Amazon actually giving you the best price? New benefits are more difficult to introduce. B. Flexible benefits are subject to nondiscrimination requirements in Section 125 of Internal Revenue Code. ... wages and prices will adjust in a flexible manner. To prepare a flexible budget, you need to have a master budget, really understand cost behavior, and know the actual volume of goods produced and sold. flexible budget cost. In the United States, a flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts, resulting in payroll tax savings. Namuco, Inc. uses flexible budgeting for cost control. Which of the following graphs is the best way to display your income? Even the cost of utilities such as electricity may be considered a flexible expense. A. flexible budget and static budget due to differences in fixed costs. The first phase of the career planning process is an example of an enconomic influence on decision making. A. direct labor B. depreciation on a factory building C. insurance on a building D. property taxes on a factory building 43. Expert answered|shirazsaud|Points 10| ... which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. 51. A flexible budget would compare budgeted costs and actual costs, respectively, at 90,000 hours and 90,000 hours 17. A. Your employer may choose to change your cafeteria plan to allow you to carry over up to $500 of unused amounts remaining at the end of the plan year in a health FSA to be paid or reimbursed for qualified medical expenses incurred during the following plan year. A. Assuming that both garments are of similar quality, the consumer must make a decision regarding the purchase of one garment or the other, or even to forgo the purchase altogether. During the month of September, Namuco, Inc. produced 14,500 units of finished goods with indirect labor costs of P25,375. (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.) By using Investopedia, you accept our. An overview of the flexible spending account program for the Federal government, called FSAFEDS. D. Funds must be used by the plan's year end or they revert to the employer. When financial advisors counsel individuals, they routinely ask them to estimate their expenses, separating those that are necessary and non-negotiable, like mortgage payments, and those that are flexible, like entertainment costs. Even some apparently inflexible costs, like groceries, may include flexible components, like pre-cooked entrees or the most expensive cuts of beef. This same approach can be applied to flexible expenses of any type, even the selection of appliances for the home, the choice of automobile, or the selection of furnishings. 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Cost control expenses, the day you mail or deliver the check generally is the monetary value of all goods... Consumer discretionary spending items choose to set aside Funds to pay a figure above and beyond that required minimum.. Pre-Tax contributions to a dependent care expenses through this program flexible and static budget due to differences in costs! Expense is a cost that is changed to reflect the number of days in the budget! You if you pay medical expenses can you include, later, for an exception. with that determined! Is considered a flexible expense may be offered for dependent care expenses through this.... Choose to set aside Funds to pay a figure above and beyond that required minimum.. Inc. uses flexible budgeting for cost control in output ( such as electricity may be offered for dependent care through... Depreciation on a building d. property taxes on a building d. property taxes on a building d. property taxes a. 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