Budgets- A budget is an estimation of the revenue and expenses over a specified future period of time and is compiled and re-evaluated on a periodic basis.
A budget can be made for a person, a family, a group of people, a business, a government, a country, a multinational organization or just about anything else that makes and spends money. A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another. A budget is an internal tool used by management and is often not required for reporting by external parties.
Budgets are estimations
A budget can be made for a person, a family, a group of people, a business, a government, a country, a multinational organization or just about anything else that makes and spends money. A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another. A budget is an internal tool used by management and is often not required for reporting by external parties.
Budgets are estimations
Static budgets vs. Flexible Budgets
Static budget- A static budget is a type of budget that incorporates anticipated values about inputs and outputs that are concieved before the period in question begins.
Flexible Budget- A flexible budget calculates different expenditure levels for variable costs, depending upon changes in actual revenue.
Both budgets are useful to management. A static budget evaluates the effectiveness of the original budgeting process, while a flexible budget provides deeper insight into business operations.
Static budget- A static budget is a type of budget that incorporates anticipated values about inputs and outputs that are concieved before the period in question begins.
Flexible Budget- A flexible budget calculates different expenditure levels for variable costs, depending upon changes in actual revenue.
Both budgets are useful to management. A static budget evaluates the effectiveness of the original budgeting process, while a flexible budget provides deeper insight into business operations.
Three Types of Expences
Fixed- a fixed expence is a expence that is every month and is always the same amount. They have to be paid by a company, independent of any business activity. Examples of fixed expences are insurance, property taxes, and utilites. Fixed costs are usally used in breakeven analysis to determine pricing and the level of production and sales under which a company generates neither profit nor loss.
Variable- a variable expence is every month and but it is a different amount. Variable costs can include direct material costs of direct labor costs necessary to complete a certain project. Some examples of a variable cost could be credit card fees, production supplies, piece rate labor, and comissions.
Discretionary- A decretionary expence is not nessisary and more of a want. This figure is the amount of money left over after paying for taxes and necessities. A person with no money remaining after paying bills has no decretionary income. Some examples are Netflix, training, donations, and parties.
Some expences are wants but go under the fixed expences because they are something that you might have to pay.
Fixed- a fixed expence is a expence that is every month and is always the same amount. They have to be paid by a company, independent of any business activity. Examples of fixed expences are insurance, property taxes, and utilites. Fixed costs are usally used in breakeven analysis to determine pricing and the level of production and sales under which a company generates neither profit nor loss.
Variable- a variable expence is every month and but it is a different amount. Variable costs can include direct material costs of direct labor costs necessary to complete a certain project. Some examples of a variable cost could be credit card fees, production supplies, piece rate labor, and comissions.
Discretionary- A decretionary expence is not nessisary and more of a want. This figure is the amount of money left over after paying for taxes and necessities. A person with no money remaining after paying bills has no decretionary income. Some examples are Netflix, training, donations, and parties.
Some expences are wants but go under the fixed expences because they are something that you might have to pay.
Household Budget Examples
A great website to help you make a budget for yourself- http://www.kiplinger.com/tool/spending/T007-S001-budgeting-worksheet-a-household-budget-for-today-a/