B. A. A static planning budget is suitable for planning but not for evaluating performance. ... wages and prices will adjust in a flexible manner. C. actual results and the expected results in the flexible … 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. Flexible budget costs and static budget costs B. In addition to recurring expenses, there also are periodic expenses. A personal spending plan, similar to a budget, helps outline where income is earned and expenses are incurred. Expenses not paid until the following year. Financially security is not being built This little known plugin reveals the answer. 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. 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. Monthly utility expenses are estimated to be $2,000 plus $2 per unit, whereas selling expenses are estimated to be $12,000. Do you wonder where all your money is going? 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 … trivia, research, and writing by becoming a full-time freelance writer. A flexible expense is a discretionary purchase that can be altered or eliminated altogether without a significant downside. 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. Adverse selection of benefits by employees results in increase in costs. A.) 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. The debtor is expected to pay a minimum amount each month, with that amount determined by the lender, not the debtor. Price variance refers to a difference between budgeted price per unit and the actual price per unit. The first phase of the career planning process is an example of an enconomic influence on decision making. To an economist, flexible expenses are consumer discretionary spending items. 6. 4. How can I Plan a Birthday Party on a Budget. Discretionary fixed expenses B. Sample Budget WorksheetThe following budget is broken down into the following types of expenditures: 3 Fixed Expenses, Periodic Fixed Expenses, Flexible Expenses and Indebtedness. Flexible benefits are subject to nondiscrimination requirements in Section 125 of Internal Revenue Code. A vacation or a new bicycle would be examples. 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. Most consumers know what they should do if they need to keep their expenses down. One example of a household fixed expense is the monthly mortgage or rent payment. For example, if a household elects to order a cable or satellite television service, the cost recurs monthly. Both flexible and static budgets can be … A budget that shows variable production costs only. The debtor can choose to set aside funds to pay a figure above and beyond that required minimum payment. Question 6 options: histogram. Investopedia uses cookies to provide you with a great user experience. 50. This is in contrast to fixed expenses, where there is no control over the amount of the expense. Question: Which Of The Following Is True When A Company Determines That Its Costs Should Be Explained By More Than One Cost Driver? A monthly budget that is changed to reflect the number of days in the month. Even inflexible expenses can contain flexible components. Choice "b" is incorrect. New benefits are more difficult to introduce. 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? The flexible-budget variance for materials is: A. A discretionary expense is a cost that is not essential for the operation of a home or a business. By using Investopedia, you accept our. Health Flexible Spending Arrangements (FSAs) carryover amount. 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. Economists often use the term consumer discretionary spending to describe flexible expenses. An FSA may be offered for dependent care assistance, adoption assistance, and medical care reimbursements. They can only be used for dependent-care expenses. Question 7 (4 points) When savings is considered a flexible expense, what typically happens? Commonly considered a flexible expense. D. TransUnion. C. They work best to the extent that employees have unpredictable expenses. A. Expert answered|shirazsaud|Points 10| _____ are costs incurred for the acquisition of short-run activity capacity, usually as the result of yearly planning. They restrict pretax employee contributions. Depending on your situation, some expenses (for example, long distance calls or a cell phone) may be considered flexible rather than fixed expenses. 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. 42. True. The decision-making process starts with gathering information. 51. 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. 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. Question 7 options: Wealth is not accumulated. Which of the following is an example of a discretionary fixed expense? variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, 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. D. "For … The "flexible budget" can best be described as a budget that adjusts: A. A. flexible budget and static budget due to differences in fixed costs. It is important to note that flexible expenses may or may not be connected with necessities. 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. Even the cost of utilities such as electricity may be considered a flexible expense. This is not the rule for determining whether an expense can be reimbursed by a flexible spending arrangement (FSA). Somewhere in between probably works for the budgets of most people. Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. Choice "a" is incorrect. Even the cost of utilities such as electricity may be considered a flexible expense. menu costs. It compares the actual costs with the budgeted costs … C. FICO. bar Graph. Which of the following BEST describes a flexible budget? 7. variable expense. A flexible budget is better than a static budget for performance evaluation since it can be adjusted to the actual production level. Since then, he has contributed articles to 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. D. Funds must be used by the plan's year end or they revert to the employer. The Flexible Budget Performance Report Should Be Prepared Using Only A Single Cost Driver. List your flexible expenditures. C. Expenses for changes in budgeted output between two periods. 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. Is Amazon actually giving you the best price? 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. After many years in the teleconferencing industry, Michael decided to embrace his passion for A. This includes information on eligible expenses, the savings calculator, claim forms and more. Fixed budgets and static budgets are syFalsenymous terms. B. Administrative burdens and expenses increase. What would be the utility expenses on the company's flexible budget if actual unit sales for April were 6,000 units? 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. If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. TRUE or FALSE. controllable difference. A. Equifax. 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. Entertainment costs can usually be broken down further into categories such as a cable television subscription, music downloads, and evenings out. 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. Some debts involve a combination of fixed and flexible expenses. Which of the following is true of a flexible budget? C. Total fixed costs will be the same for a flexible budget and a master budget.. Which of the following statements about static and flexible budgets is not true? 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. Which one of the following uses your credit history to determine your credit score? league baseball, and cycling. In short, the flexible budget is a more useful tool when measuring a manager's efficiency. Example of Flexible Budgets. It's the filet mignon in the grocery 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. Understanding what does and does not constitute a fixed cost or expense can make a significant impact on how well an individual or business manages income and stays within the monthly budget. Flexible budget variance is the difference between the: A. flexible budget and static budget due to differences in fixed costs. B. A flexible budget variance for a manufacturing cost is computed as the difference between: A. 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. 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. 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. actual costs are compared with the expected costs at the same level of activity. #40 which of the following statement is false? This is true with many credit card accounts. It is important to pay the same amount each month in order to be considered current with the debt. Both flexible and static budgets include both variable and fixed costs. Which of the following is NOT a disadvantage of flexible benefit programs? For example, food is considered an essential expense in the household budget. B. expected results in the flexible budget for the units expected to be sold and the static budget. B.) Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis. devotional anthologies, and several newspapers. 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. It is possible, however, to adjust the amount of resources that are devoted to food consumption for the weekly or monthly budget. Malcolm’s other interests include collecting vinyl records, minor O A static budget can be used to measure performance and to identify discrepancies between budgeted and actual costs. A flexible expenses and a periodic expense are basically the same thing. 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. It compares the actual costs with the budgeted costs for the budgeted level of activity. 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. line Graph. Namuco, Inc. uses flexible budgeting for cost control. E. flexible budget cost. ... which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. The consumer has the option of purchasing garments that are available at a discount, or buying similar items that are sold at full price. Even some apparently inflexible costs, like groceries, may include flexible components, like pre-cooked entrees or the most expensive cuts of beef. Various articles of clothing are examples of flexible expenses. Its annual master budget reflects an indirect labor costs, a variable cost, of P360,000 based on an annual production of 200,000 units. 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. Save. The expense may be reduced by opting for a plan with fewer premium channels. B. expected results in the flexible budget for the units expected to be sold and the static budget. An overview of the flexible spending account program for the Federal government, called FSAFEDS. Revenues and expenses for changes in output (such as sales volume). Or, the truly budget-conscious can buy an inexpensive digital antenna and watch broadcast television for free. 4. Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. In personal budgeting, a flexible expense is one that can be cut back or eliminated. 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. Amazon Doesn't Want You to Know About This Plugin. $2,000 favorable. 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. Consumer discretionary is an economic sector comprising non-essential products that individuals may only purchase when they have excess cash. The company pays a monthly rent of $2,000. A flexible budget would compare budgeted costs and actual costs, respectively, at 90,000 hours and 90,000 hours 17. A flexible expense may be recurring, although the amount spent and the decision to incur the expense are still matters of choice. 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. flexible budget variance. Which of the following graphs is the best way to display your income? Actual costs and flexible budget costs C. Departmental costs and cost center costs D. Flexible budget costs and original budget costs Understanding what does and does not constitute a fixed cost or expense … A. direct labor B. depreciation on a factory building C. insurance on a building D. property taxes on a factory building 43. Which of the following statements is true? Revenues for sales-dollar changes. Learn about a little known plugin that tells you if you're getting the best price on Amazon. 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. 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%. False. Higher interest rates results in higher costs of borrowing money. pie chart. Which of the following statements is true about flexible spending accounts? B. Experian. A company anticipates selling $200,000 of goods, of which $15,000 will probably be uncollectible. (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.) 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Investopedia uses cookies to provide you with a great user experience a new bicycle would be examples variable,! Investopedia uses cookies to provide you with a great user experience spending to flexible... Decedent under Whose medical expenses by check, the cost of utilities such electricity. Or eliminated seems to be faced with an extraordinary range of goods, of which 15,000. An exception. they have excess cash FSAs ) carryover amount similar to a dependent care spending... Have excess cash periodic expenses useful tool when measuring a manager 's efficiency but can be reduced by opting a... Into categories such as a cable television subscription, music downloads, and cycling is which of the following is a flexible expense the. Often use the term consumer discretionary is an economic sector comprising non-essential products that individuals Only! To reflect the number of days in the household budget personal spending plan, similar to a budget is to... 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