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Flexible budget



Definition

Flexiblebudgetisequaltoflexiblebudget.Flexiblebudgetingmethod,alsoknownasvariablebudgetingmethodandslidingbudgetingmethod,isamethodofpreparingbudgetsbasedonthevariablecostmethodandbasedondifferentbusinesslevelsinthefuture.Itisasymmetricalfixedbudget.Itreferstoanexpensebudgetthatispreparedbasedonthevariousbusinessvolumelevelsthatmayoccurduringthebudgetperiod,andthecorrespondingexpenseamountsaredeterminedrespectively,andthatcanadapttomultiplebusinessvolumelevels.Inordertoreflectthelevelofexpenses(orprofit)thatshouldbespent(orobtained)underthecircumstancesofeachbusinessvolume.Itispreciselybecausethiskindofbudgetcanreflecttheamountofexpenditurecontrolateachlevelofbusinessvolumewithchangesinbusinessvolume,andhasacertaindegreeofflexibility,soitiscalled"flexiblebudget".

Whenusingtheflexiblebudgetmethodtopreparethecostbudget,thekeyistodivideallcostsintovariablecostsandfixedcosts.Variablecostsaremainlycontrolledbasedonunitbusinessvolume,whilefixedcostsarecontrolledbasedontotalamount.Theflexiblecostbudgetmethodisasfollows:flexiblecostbudget=fixedcostbudgetnumber+∑(unitvariablecostbudgetnumber×estimatedbusinessvolume)

Basiccontent

Flexiblebudget-flexiblepreparationBudgetingsteps:

Thestepsforpreparingaflexiblebudgetareasfollows:

①Selectanddeterminetheunitconsumption,man-hours,andmachine-hoursofvariousbusinessactivities.

②Predictanddeterminethepossiblebusinessvolumeofvariousbusinessactivities.Whendeterminingthebusinessvolumeofeconomicactivities,itisnecessarytocoordinatewitheachbusinessdepartment.Generally,itcanbedeterminedaccordingtotherangeof70%-120%ofthenormalbusinessactivitylevel,oritcanbedeterminedaccordingtotheminimumbusinessvolumeandthemaximumbusinessvolumeinthepasthistoricaldata.Upperandlowerlimits,andthendividethemintoseverallevels,sothattheflexiblebudgetcompiledismorepractical.

③Accordingtothedependencerelationshipbetweencostbehaviorandbusinessvolume,theproductioncostoftheenterpriseisdividedintovariableandfixedcategories,andtherelationshipbetweenvariousexpensesandbusinessvolumeisdetermineditembyitem.

④Calculatetheforecastdataundervariousbusinessvolumelevelsandexpresstheminacertainwaytoformaflexiblebudgetforacertainitem.

Mainfeaturesofflexiblebudget:

①Itcanprovideaseriesofproductionandoperationbusinessvolumebudgetdata,whichiscompiledforaseriesofbusinessvolumelevels.Therefore,whenacertainWhentheactualbusinessvolumeofthebudgetitemreachesanylevel(mustbewithintheselectedbusinessvolumerange).Allhavetheirapplicablesetofcontrolstandards.

②Becausethebudgetislistedseparatelyaccordingtothenatureofeachcost,itisconvenienttocalculatethepredictedcostunderanyactualbusinessvolumelevel,sothatthemanagementstaffcanstrictlycontrolthecostbeforehand.Expensesprovideconvenience,anditisalsoconducivetodetailedanalysisofthereasonsforvariouscostsavingsoroverspendingaftertheevent,andtosolvetheprobleminatimelymanner.

Theadvantagesandapplicabilityofflexiblebudgets

Theadvantagesofflexiblebudgetsare:ontheonehand,theycanadapttochangesindifferentoperatingThecontrolfunctionavoidsfrequentrevisionstothebudgetwhentheactualsituationchanges;ontheotherhand,itcanmaketheevaluationandassessmentoftheactualimplementationofthebudgetbeestablishedonamoreobjectiveandcomparablebasis.

Thismethodissuitableforvariousprojectexpendituresthatvarywiththevolumeofbusiness,suchastheschool’sgoodsprocurementproject.Sincetheenrollmentscaleofstudentsvariesgreatly,thenumberofenrollmentandtheThenumberofdesks,benches,beds,thenumberofschoolbuildingsthatshouldbepurchasedfortheestimationofthenumberofstudentsintheschool,orotherprocurementitems.

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