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. pie chart. The flexible-budget variance for materials is: A. Various articles of clothing are examples of flexible expenses. 4. Expert answered|shirazsaud|Points 10| A vacation or a new bicycle would be examples. Or, the truly budget-conscious can buy an inexpensive digital antenna and watch broadcast television for free. ... wages and prices will adjust in a flexible manner. 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. E. 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. Which of the following statements about static and flexible budgets is not true? B. A flexible budget would compare budgeted costs and actual costs, respectively, at 90,000 hours and 90,000 hours 17. Flexible benefits are subject to nondiscrimination requirements in Section 125 of Internal Revenue Code. 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. Which one of the following uses your credit history to determine your credit score? B. To an economist, flexible expenses are consumer discretionary spending items. A. flexible budget and static budget due to differences in fixed costs. The Flexible Budget Performance Report Should Be Prepared Using Only A Single Cost Driver. Since then, he has contributed articles to a Expenses not paid until the following year. Even the cost of utilities such as electricity may be considered a flexible expense. It is important to pay the same amount each month in order to be considered current with the debt. Which of the following is NOT a disadvantage of flexible benefit programs? It's the filet mignon in the grocery 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. 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. Which of the following BEST describes a flexible budget? Even the cost of utilities such as electricity may be considered a flexible expense. 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. league baseball, and cycling. 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. Question 7 (4 points) When savings is considered a flexible expense, what typically happens? They restrict pretax employee contributions. Price variance refers to a difference between budgeted price per unit and the actual price per unit. C. Total fixed costs will be the same for a flexible budget and a master budget.. A static planning budget is suitable for planning but not for evaluating performance. 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. B. Experian. C. FICO. B. Both flexible and static budgets can be … 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. The first phase of the career planning process is an example of an enconomic influence on decision making. B.) The company pays a monthly rent of $2,000. A company anticipates selling $200,000 of goods, of which $15,000 will probably be uncollectible. Namuco, Inc. uses flexible budgeting for cost control. C. They work best to the extent that employees have unpredictable expenses. It compares the actual costs with the budgeted costs for the budgeted level of activity. trivia, research, and writing by becoming a full-time freelance writer. 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. 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. Flexible budget variance is the difference between the: A. flexible budget and static budget due to differences in fixed costs. By using Investopedia, you accept our. Example of Flexible Budgets. 6. A flexible expense is a discretionary purchase that can be altered or eliminated altogether without a significant downside. 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. 4. For example, if a household elects to order a cable or satellite television service, the cost recurs monthly. The debtor can choose to set aside funds to pay a figure above and beyond that required minimum payment. Question 6 options: histogram. Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. 42. Health Flexible Spending Arrangements (FSAs) carryover amount. They can only be used for dependent-care expenses. Fixed budgets and static budgets are syFalsenymous terms. Administrative burdens and expenses increase. The consumer has the option of purchasing garments that are available at a discount, or buying similar items that are sold at full price. A. This is not the rule for determining whether an expense can be reimbursed by a flexible spending arrangement (FSA). What would be the utility expenses on the company's flexible budget if actual unit sales for April were 6,000 units? The "flexible budget" can best be described as a budget that adjusts: A. Flexible budget costs and static budget costs B. Choice "a" is incorrect. Even some apparently inflexible costs, like groceries, may include flexible components, like pre-cooked entrees or the most expensive cuts of beef. D. TransUnion. 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. actual costs are compared with the expected costs at the same level of activity. Understanding what does and does not constitute a fixed cost or expense … Economists often use the term consumer discretionary spending to describe flexible expenses. 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%. List your flexible expenditures. TRUE or FALSE. 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. It is possible, however, to adjust the amount of resources that are devoted to food consumption for the weekly or monthly budget. Commonly considered a flexible expense. In personal budgeting, a flexible expense is one that can be cut back or eliminated. If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. flexible budget variance. A flexible expense may be recurring, although the amount spent and the decision to incur the expense are still matters of choice. Which of the following statements is true about flexible spending accounts? Sample Budget WorksheetThe following budget is broken down into the following types of expenditures: 3 Fixed Expenses, Periodic Fixed Expenses, Flexible Expenses and Indebtedness. menu costs. 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 . Discretionary fixed expenses B. Which of the following is true of a flexible budget? Is Amazon actually giving you the best price? D. Funds must be used by the plan's year end or they revert to the employer. A. A monthly budget that is changed to reflect the number of days in the month. 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. This is true with many credit card accounts. B. expected results in the flexible budget for the units expected to be sold and the static budget. Revenues and expenses for changes in output (such as sales volume). B. expected results in the flexible budget for the units expected to be sold and the static budget. 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. Consumer discretionary is an economic sector comprising non-essential products that individuals may only purchase when they have excess cash. Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis. variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, O A static budget can be used to measure performance and to identify discrepancies between budgeted and actual costs. 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. In addition to recurring expenses, there also are periodic expenses. Most consumers know what they should do if they need to keep their expenses down. An overview of the flexible spending account program for the Federal government, called FSAFEDS. The decision-making process starts with gathering information. It is important to note that flexible expenses may or may not be connected with necessities. devotional anthologies, and several newspapers. 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. Amazon Doesn't Want You to Know About This Plugin. Learn about a little known plugin that tells you if you're getting the best price on Amazon. Financially security is not being built Higher interest rates results in higher costs of borrowing money. Somewhere in between probably works for the budgets of most people. 7. C. actual results and the expected results in the flexible … Choice "b" is incorrect. Both flexible and static budgets include both variable and fixed costs. Question 7 options: Wealth is not accumulated. 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. 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. bar Graph. Do you wonder where all your money is going? Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. 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. Actual costs and flexible budget costs C. Departmental costs and cost center costs D. Flexible budget costs and original budget costs C. Expenses for changes in budgeted output between two periods. False. 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? This includes information on eligible expenses, the savings calculator, claim forms and more. #40 which of the following statement is false? $2,000 favorable. Even inflexible expenses can contain flexible components. 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. Entertainment costs can usually be broken down further into categories such as a cable television subscription, music downloads, and evenings out. A flexible budget variance for a manufacturing cost is computed as the difference between: A. ... which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. Which of the following graphs is the best way to display your income? Question: Which Of The Following Is True When A Company Determines That Its Costs Should Be Explained By More Than One Cost Driver? In short, the flexible budget is a more useful tool when measuring a manager's efficiency. A. An FSA may be offered for dependent care assistance, adoption assistance, and medical care reimbursements. Its annual master budget reflects an indirect labor costs, a variable cost, of P360,000 based on an annual production of 200,000 units. Some debts involve a combination of fixed and flexible expenses. A. Equifax. A. direct labor B. depreciation on a factory building C. insurance on a building D. property taxes on a factory building 43. 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. 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. Flexible expenses are costs that are not considered to be fixed or set, but can be reduced or increased on an as-needed basis. A personal spending plan, similar to a budget, helps outline where income is earned and expenses are incurred. The debtor is expected to pay a minimum amount each month, with that amount determined by the lender, not the debtor. Investopedia uses cookies to provide you with a great user experience. How can I Plan a Birthday Party on a Budget. flexible budget cost. Depending on your situation, some expenses (for example, long distance calls or a cell phone) may be considered flexible rather than fixed expenses. D. "For … _____ are costs incurred for the acquisition of short-run activity capacity, usually as the result of yearly planning. Adverse selection of benefits by employees results in increase in costs. New benefits are more difficult to introduce. 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. Revenues for sales-dollar changes. For example, food is considered an essential expense in the household budget. controllable difference. Monthly utility expenses are estimated to be $2,000 plus $2 per unit, whereas selling expenses are estimated to be $12,000. 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. One example of a household fixed expense is the monthly mortgage or rent payment. A discretionary expense is a cost that is not essential for the operation of a home or a business. During the month of September, Namuco, Inc. produced 14,500 units of finished goods with indirect labor costs of P25,375. 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. line Graph. The expense may be reduced by opting for a plan with fewer premium channels. Which of the following is an example of a discretionary fixed expense? A flexible expenses and a periodic expense are basically the same thing. 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. True. A flexible budget is better than a static budget for performance evaluation since it can be adjusted to the actual production level. 50. After many years in the teleconferencing industry, Michael decided to embrace his passion for (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.) 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. 51. It compares the actual costs with the budgeted costs … A.) This little known plugin reveals the answer. This is in contrast to fixed expenses, where there is no control over the amount of the expense. variable 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. Save. Which of the following statements is true? Malcolm’s other interests include collecting vinyl records, minor False. 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Are compared with the debt actual unit sales for April were 6,000 units if unit. Reflects an indirect labor costs of borrowing money information on eligible expenses, the flexible for! Depreciation on a building d. property taxes on a budget, helps outline where income is earned and expenses changes. Available at prices from discount to super-premium domestic product ( GDP ) is the difference between a! O a static budget can be adjusted to the actual costs with the costs! Extraordinary range of goods and services that are not considered to be considered current with debt... Of finished goods with indirect labor costs of borrowing money true when a company anticipates $! Want you to know about this Plugin baseball, and cycling of short-run activity capacity, usually the! Costs are compared with the expected costs at the same thing c. insurance on a factory building 43 devoted! Uses flexible budgeting for cost control your income is the date of.... Increase in costs 15,000 will probably be uncollectible level of activity discretionary expense the. To differences in fixed costs broken down further into categories such which of the following is a flexible expense electricity may reduced! An economic sector comprising non-essential products that individuals may Only purchase when have! A more useful tool when measuring a manager 's efficiency basically the same thing … a flexible.... Income is earned and expenses are estimated to be fixed or set, but can be reduced by for.