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THE FLEXIBLE BUDGET– BASIC TOOL OF THE MANAGEMENT CONTROL IN THE ECONOMIC ENTITIES

Mariana Radu () and George Ciprian Giju ()
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Mariana Radu: Faculty of Economic Sciences, Valahia University of Târgoviºte, Romania
George Ciprian Giju: Faculty of Economic Sciences, Valahia University of Târgoviºte, Romania

Scientific Bulletin - Economic Sciences, 2015, vol. 14, issue 1, 3-10

Abstract: In the content of this article we emphasize the importance of flexible budgeting of expenses for an economic entity. We focused on indirect costs of production, since they include both variable costs and fixed costs, and the way of their budgeting is different. In the first part of the paper we illustrate how to prepare a flexible budget for more predictable levels of activity, and in the second part, we show how to recalculate budgeted expenses for the actual volume of activity. The budget recalculated for the actual volume of activity allows the comparison, in the correct way, of expenditure forecast to those actually incurred, expenses that relate to the same volume of activity.

Keywords: budget; deviations; costs; control; levels of activity. (search for similar items in EconPapers)
JEL-codes: M41 L21 (search for similar items in EconPapers)
Date: 2015
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