A budget that shows the expected result of the responsibility center for only one activity level is referred to as a static budget.
An example of a budget that includes predicted values for inputs and outputs that are thought of before the period in question begins is a static budget. Even with changes in sales and production quantities, a static budget, which is a projection of revenues and expenses for a given period, stays the same. The figures from static budgets can, however, be very different from the real results as compared to those that are discovered after the fact. Accountants, finance experts, and management teams of businesses utilize static budgets to assess the financial success of a company over time.
The static budget is meant to be constant throughout the time period, independent of changes that might have an impact on results. Some managers use a static budget to forecast the company's metrics, while others use it as a target for expenses, costs and income.
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