#1  Joe Julian Wednesday Jun 21 at 1:02am Manage Discussion Entry Many of us have some type of budget, whether it is how much money we spend when dining out, or even something simple like how much money we should spend around the holidays. Of course as humans we want the best things, but sadly money doesn't grow on trees so we have to manage our money, watch what we buy, and set budgets on certain things. According to Wainwright, “ Budgets  are detailed financial plans that quantify future expectations and actions. These expectations and actions relate to numerous facets of business, including planned sales, staffing needs, acquisition of materials to support production, financing, and expenditures for plant assets” (Wainwright, 2012. Sec. 6.1, Para. 1). What Wainwright is saying is that budgets are used when thinking about future plans and actions that may happen like planned sales, staffing needs, and financing. I am not good with money, but I even have my own budget when it comes to buying things like video games. It may sound foolish but the game will be around for a while and when the price drops I usually get the game or find a place that is selling it cheaper. Wainwright continues to say, “Budgets are important in proper control of all facets of business operation” (Wainwright, 2012. Sec. 6.1, Para. 1). What Wainwright is saying is that budgets are important when looking at every side of the business deal. It is good to look at every angle to see if the business is functioning well, and if it is you may catch the eyes of investors or creditors that want to invest in the business; not to mention if your business knows how to budget well you may find yourself in a possible partnership with another business. The main difference that I noticed between a static budget and a fixed budget is how they are planned. With a static budget it is usually planned in advance based on previous budgets. In other words, if the budget that you set was over the limit or under the limit, you would plan how the budget would be for the next month or even year. With a flexible budget you can adjust or adapt to changes in the company or business. In other words, if the budget is under then you can adjust and fix it buy making the budget higher then what it was the previous month or year. Even though I think adapting to change is very important, I don't think that a flexible budget is always the best choice. Like I mentioned above, if the budget is low then it can be set higher the next month or year, but what if the company or business doesn't have accurate numbers. This can be stressful and even problematic if the budget isn't accurate because then the company/business will have difficulties when it comes to settling what costs and revenue they have. If they have more money and didn't make enough sells, then where did that extra money come from and what are they going to do with it. The same can be said if the company/business was under budget as well. Why we ...

1. #1
Joe Julian
Wednesday
Jun 21 at 1:02am
Manage Discussion Entry
Many of us have some type of budget, whether it is how much
money we spend when dining out, or even something simple
like how much money we should spend around the holidays. Of
course as humans we want the best things, but sadly money
doesn't grow on trees so we have to manage our money, watch
what we buy, and set budgets on certain things. According to
Wainwright, “
Budgets
are detailed financial plans that quantify future expectations
and actions. These expectations and actions relate to numerous
facets of business, including planned sales, staffing needs,
acquisition of materials to support production, financing, and
expenditures for plant assets” (Wainwright, 2012. Sec. 6.1,
Para. 1). What Wainwright is saying is that budgets are used
when thinking about future plans and actions that may happen
like planned sales, staffing needs, and financing. I am not good
with money, but I even have my own budget when it comes to
buying things like video games. It may sound foolish but the
game will be around for a while and when the price drops I
usually get the game or find a place that is selling it cheaper.
Wainwright continues to say, “Budgets are important in proper
control of all facets of business operation” (Wainwright, 2012.
Sec. 6.1, Para. 1). What Wainwright is saying is that budgets
are important when looking at every side of the business deal. It
is good to look at every angle to see if the business is
functioning well, and if it is you may catch the eyes of investors
or creditors that want to invest in the business; not to mention if
your business knows how to budget well you may find yourself
in a possible partnership with another business.

2. The main difference that I noticed between a static budget and a
fixed budget is how they are planned. With a static budget it is
usually planned in advance based on previous budgets. In other
words, if the budget that you set was over the limit or under the
limit, you would plan how the budget would be for the next
month or even year. With a flexible budget you can adjust or
adapt to changes in the company or business. In other words, if
the budget is under then you can adjust and fix it buy making
the budget higher then what it was the previous month or year.
Even though I think adapting to change is very important, I
don't think that a flexible budget is always the best choice. Like
I mentioned above, if the budget is low then it can be set higher
the next month or year, but what if the company or business
doesn't have accurate numbers. This can be stressful and even
problematic if the budget isn't accurate because then the
company/business will have difficulties when it comes to
settling what costs and revenue they have. If they have more
money and didn't make enough sells, then where did that extra
money come from and what are they going to do with it. The
same can be said if the company/business was under budget as
well. Why weren't more sells made and where did the money go.
This may just be me, but I would prefer a static budget over a
flexible budget when it comes time to open up my business
because you can expect or even guess what the budget will be
when looking at previous budgets.
I would recommend a flexible budget if you feel comfortable
enough using it. What I mean by this is if you go out to a
restaurant and have a certain budget set, you should bring a
little more money because you never know what everyone will
order. In terms of business, a flexible budget could come in
handy when certain items or inventory are selling better than
others; if that item's sells start to decline then you can adjust
accordingly to the situation.
We all want the best and newest things, why do you think that
many of us go and get new Iphones when they come out.
Without a budget then we would be spending money like crazy

3. and if we happen to own a business then that could mean not
having enough money for inventory or repairs of certain items,
which could cause the business to start declining. Even though
we want the best and newest items a good way to think is, Do I
want this item or Do I need it?
Reference:
Wainwright, S. K. (Ed.) (2012). Principles of Accounting:
Volume II [Electronic version]. Retrieved from
https://content.ashford.edu/
Links to an external site.
#2
Lauralee Beans
Wednesday
Jun 21 at 6:29am
Manage Discussion Entry
"A flexible budget can be prepared either before or after actual
production is known. Preparing a flexible budget "after the fact"
may help explain variances and aid in performance evaluation,
but it does little to facilitate corporate planning. For planning
purposes, it is better to prepare the flexible budget (or a
financial model of the anticipated outcomes) in advance."
(Wainwright, 2012).
"The Static budget was developed for a single level of activity.
A shortcoming of this approach is that it is insensitive to
volume fluctuations. This presents special challenges for
managing a business and for performance evaluation. As actual
output varies from the anticipated level, significant deviations
in revenues and expenses will naturally occur. These variances
can produce quite misleading signals." (Wainwright, 2012).
I believe that a flexible budget would be best because you are
able to adjust things throughout if there is an increase in

4. demand for a product and things of that sort. A static budget is
something that is set and isn't flexible with demands.
#3
Selene Million
Wednesday
Jun 21 at 9:39am
Manage Discussion Entry
“Standards
are
the
predetermined
expectations
about
the
inputs
that
will
be
required
to
achieve
anticipated
output.
For
a
manufacturer,
inputs
generally
relate
to
the
factors
of
production,
namely

5. materials,
labor,
and
overhead.
Output
is
usually
(but
not
always)
the
product
or
service
that
is
to
be
delivered
to
a
customer.
Standard
costs
express
a
measure
of
what
the
factors
of
production
should
cost” (Wainwright, 2012).

6. Without standards, there is no base line for predictions or
comparability.
Many organizations that use the method of comparing current
results with actual results of previous accounting periods are
likely to encounter problems.
Especially if industry costs are constantly changing.
If the only information used to set the standards for the current
accounting period is the data from the previous accounting
period, there will be problems.
There has to be other data considered when making these
predictions.
There are many other variables that need to be considered, such
as, labor variances, material cost variances, overhead variances,
quantity variances and volume variances.
For many companies, these amounts will change on a very
regular basis and there needs to be allowances for these changes
to stay competitive in the current marketplace.
A company could find themselves in real financial trouble if
they only rely upon data from the previous reported accounting
cycle.
References:
Wainwright, S. K. (Ed.) (2012).
(Links to an external site.)
Links to an external site.
Links to an external site.
Principles of accounting: Volume II
[Electronic version]. Retrieved from
https://content.ashford.edu
Links to an external site.

7. #4
Dee Dee Uranga
Wednesday
Jun 21 at 2:04pm
Manage Discussion Entry
Standard costs allow an organization to compare the actual
results to previous results. I could see how this could prepare a
business based on what the previous results were and give them
something to start with.
For example, an organization sells flags at the Independence
Day parade. A number of flags sold the year before could give
the organization an idea of how many they may need. The
problem with the standard cost method is that if the city is a
military community, then the population may have changed. The
population factor is significant to the results that may happen in
a given year. There are factors that change in the economy that
will affect the actual costs versus the historical costs. The
performance will change based on the population change. There
could be more flags and more labor needed to sell them to the
increase in population.
What if another organization decides to give away flags during
the parade? The historical results are that there was a parade
and that flags were sold. The standard cost is a good start but
does not take into account any changes that have been made
between the past results and the actual results.
Another economic change that needs to be considered is tax and
wage increases. If there is an increase in minimum wage, then
the actual costs will be higher than the historical. Organizations
must account for the increased costs of labor compared to
previous accounting periods.
The materials used by the organizations would also be
inaccurate and could cost the organization. If the cost of
materials increase, that would not be recorded under the

8. standard cost system. The clear intention is to record the raw
materials inventory at the standard price, regardless of the
actual price (Wainwright, 2012). An increase or decrease would
not be recorded, and that does not account for the actual prices.
Labor usage is the same way and can be misleading when
comparing results.
V/R,
Dee Dee Uranga
References
Wainwright, S. K. (Ed.) (2012).
Principles of Accounting: Volume II
[Electronic version]. Retrieved from https://content.ashford.edu