Static vs flexible budgets for new businesses


A static budget is defined as a budget that is “planned ahead of time based on the owner’s best guess about future actual activity.” This type of budget is therefore put together for the upcoming time period, and is often based on the data from past time periods, plus or minus different adjustments that management thinks will be necessary. In contrast, a flexible budget is one where the business management can make changes in the midst of an accounting period. Flexible budgeting allows for management to make better decisions on the fly, because the information used in those decisions is kept more up-to-date. Static budgeting relies only on the ability of management to analyze the numbers after the period in order to determine the magnitude and direction of variance, along with the causes of variance. For a flexible budget, management can identify issues with the budget right away, and take steps to deal with them. The new strategy and tactics can then be reflected the budget.

Don't use plagiarized sources. Get Your Custom Essay on
Static vs flexible budgets for new businesses
Just from $9/Page
Order Essay

For the charter school, the budget presented is basically three static budgets. The budgets are set depending on the number of students, which is unknown. However, this budget does not reflect capacity to update the figures depending on what actual enrollment looks like. Instead, management would probably just use the closest number to the actual as a comparable when looking at variance. Thus, only one of these three budgets would actually be chosen for the variance analysis.

The total revenue per student, excluding grants, and net of the TRA reduction, is $6,064.06. This is determined by adding up the different revenue categories to determine a total non-grant revenue figure per student.

In calculating the total expenses per student, the school must separate out the fixed expenses and the variable expenses. The total expenses per student depend on the number of students. So at the 120 student level, the total expenses are $4,518 per student. At the 100 student level, total expenses per student are $5,283 and at the 66 student level the total expenses per student are $7,646. The vast majority of expense categories — and most of the expenses by dollar — are fixed. Variable expenses are only $694.5 per student. Fixed expenses are $458,817.

There are few expenses that are not necessary. The ones that could be offset by parents, such as field trips, could be cut from the budget. Others, however, are relatively minor. There could be cuts made with things like grass removal, but the bigger cuts would be in items that have a fixed/variable component. Staff levels — especially teachers — should be variable depending on the number of students. A school with 66 students will need about half the number of teachers as a school with 120 students. Yet, the payroll expense does not change depending on the number of students. Given that this is the biggest expense, surely adjusting it for class size would be a logical means of controlling costs. At some point, a baseline level of staff is required to run the premises, but at least some of class instruction is a variable expense and should be dependent on the number of students.

This school seems viable. The budget is set out for three different levels of enrollment, two of which are profitable without any work done on the budget at all. The third level, 66 students, is profitable if just a single teacher (or maybe 1 1/2 FTEs) is cut. Additionally, some services might not be viable. Special education students receive 0.5 FTEs worth of teacher, but if none are in the school, that could be cut. It is conceivable, given how small this school is, that this 0.5 teacher FTE is being used for only one or two students, which is poor value for money.

The breakeven point can be calculated on the basis of the fixed costs. The contribution margin is:

Non-grant revenue: $6,064.06 less variable costs $694.50 = contribution $5,369.56. This is then divided by the fixed costs to determine the breakeven point: 85.44, or 86 students since we don’t chop them in half. This figure assumes no grants, because often these grants are not guaranteed. Conservative budgeting holds that grants should be omitted from the budget because their lack of certainty means they cannot be relied on.

There are a few benefits of preparing this budget. The first such benefit is that the school can understand its breakeven enrollment point. After that point, the school would either consider closing if it cannot meet that point going forward or it can start to cut costs. Preparing this type of budget can help the school understand what costs are fixed and what are variable. In addition, it can shed light on what costs are too high, and what costs can be cut to help it improve its profitability. The school would also be able to gain a sense of how much it relies on grants, again helping it to make a better decision regarding the school’s long-term viability. The information that is derived from putting this budget together can help in control, because managers are able to make better decisions, and the effects of those decisions can be better monitored.

Variance analysis is one tool for control, but it has limits. It allows management to understand the magnitude and direction of variances, calling attention to line items that are misaligned with expectations. Knowing what the main areas of concern are helps to focus management’s attention on problem areas. The main limit of variance analysis is that it is backwards-focused. The variances are all in the past, so the information might be dated by the time that it is processed. In addition, variances could occur from poor estimates rather than any external event. Variance analysis should always be used in conjunction with other control mechanisms.

Other control mechanisms can be non-accounting in nature, such as setting performance standards for people and products. These should be congruent with the accounting performance measures. As far as accounting performance measures are concerned, control can be assisted with flexible budgets that allow for more rapid response to issues. The charter school is a new business, so flexible budgeting would be a valuable tool because the figures in the static budget might not be particularly realistic. Additionally, benchmarking is a good tool for a company in a business where there are other firms doing the same thing. Thus, other charter schools would be a good benchmark for the firm to analyze its ongoing performance. This school wants to achieve what other similar schools have already achieved, and that is what benchmarking allows for. In addition, benchmarking is a good way to set the initial static budget as well, for management of the school to have a good starting point for their basic control mechanisms.

Works Cited:

Mueller, D. (2012). Static budget vs. flexible budget. eHow. Retrieved September 12, 2012 from

Bigelow, L. (2012). Static vs. flexible budgets for new businesses. Houston Chronicle. Retrieved September 12, 2012 from

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment Help Service Works

1. Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2. Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3. Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4. Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essay GET A PERFECT SCORE!!! smile and order essay Buy Custom Essay

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!
Open chat
Need assignment help? You can contact our live agent via WhatsApp using +1 718 717 2861

Feel free to ask questions, clarifications, or discounts available when placing an order.
  +1 718 717 2861           + 44 161 818 7126           [email protected]
  +1 718 717 2861         [email protected]