Static Budget

AAA

DEFINITION of 'Static Budget'

A type of budget that incorporates anticipated values about inputs and outputs that are conceived before the period in question begins. When compared to the actual results that are received after the fact, the numbers from static budgets are often quite different from the actual results.

INVESTOPEDIA EXPLAINS 'Static Budget'

When the static budget is compared to other facets of the budgeting process (such as the flexible budget and the actual results), two types of variances can be derived:

1. Static Budget Variance: The difference between the actual results and the static budget

2. Sales Volume Variance: The difference between the flexible budget and the static budget

These variances are used to assess whether the differences were favorable (increased profits) or unfavorable (decreased profits).

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Performance Budget

    A budget that reflects the input of resources and the output ...
  3. Capital Budgeting

    The process in which a business determines whether projects such ...
  4. Expense

    1. The economic costs that a business incurs through its operations ...
  5. Revenue

    The amount of money that a company actually receives during a ...
  6. Budget

    An estimation of the revenue and expenses over a specified future ...
Related Articles
  1. Bloated Budget? How To Trim The Fat
    Options & Futures

    Bloated Budget? How To Trim The Fat

  2. Budget Without Blowing Off Your Friends
    Options & Futures

    Budget Without Blowing Off Your Friends

  3. The Beauty Of Budgeting
    Budgeting

    The Beauty Of Budgeting

  4. How Budgeting Works For Companies
    Budgeting

    How Budgeting Works For Companies

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center