ECONOMICS

Detailed explanation-1: -Static Budget-the budget is prepared for only one level of production volume. Also called a Master budget. Flexible Budget-a summarized budget that can easily be computed for several different production volume levels. Separates variable costs from fixed costs.

Detailed explanation-2: -A master budget is also considered a static budget. It is a static budget because it is primarily geared to a single level of production and sales. It usually includes three main components naming as the operating budget, the capital budget, and a pro forma financial statement.

Detailed explanation-3: -What is a master budget? A master budget is a company’s central financial planning document. It typically covers a full fiscal year and includes “lower-level” budgets-like a sales budget and a labor budget-cash flow forecasts, financial statements, and a financial plan.

Detailed explanation-4: -What Is a Static Budget? A static budget is a budget that uses predicted amounts for a given period prior to the period beginning. The unique aspect of a static budget is that it does not change regardless of deviations in revenue and expenses.

Detailed explanation-5: -A static budget can be defined as the kind of budget that anticipates all revenue and expenses over a particular period in advance. Here changes in the level of production/ sales or any other major factor do not affect the budgeted data, and hence it is also called a fixed budget.