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