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