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

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