ECONOMICS

Detailed explanation-1: -A static budget is one that is prepared based on a single level of output for a given period. The master budget, and all the budgets included in the master budget, are examples of static budgets. Actual results are compared to the static budget numbers as one means to evaluate company performance.

Detailed explanation-2: -Static budgets are geared to one level of activity. They work well for evaluating performance when the planned level of activity is the same as the actual level of activity, or when the budget report is prepared for fixed costs.

Detailed explanation-3: -Static budget is the one which is prepared for only one expected level of activity.

Detailed explanation-4: -A static budget is essentially a base-case budget that accountants or finance leaders use as a roadmap for the period. Because the budget does not change, it is a helpful tool for monitoring expenses and revenue generation.

Detailed explanation-5: -Fixed budget are static budget which remains constant, irrespective of the level of activity i.e budget is prepared on a standard volume of output. On the other side, flexible budget is prepared for different level of production. Flexible budget changes with the level of activity.