The following information is for X Company for 2014: 1. What was the 2014 master (static) budget for total costs? 2. What was the 2014 flexible budget for total costs? Solution 1. A static budget is a budget that does not change as volume changes. Thus, $197,900 is the static budget. 2. A flexible budget is a budget that changes as volume changes. Thus, $110,000 is the flexible budget. .

1. The following information is for X Company for 2014:
1. What was the 2014 master (static) budget for total costs?
2. What was the 2014 flexible budget for total costs?
Master Actual
Budget Results
Production 11,000 units 11,500 units
Total variable costs $110,000 $125,115
Total fixed costs $197,900 $197,687
Solution
1. A static budget is a budget that does not change as volume changes. Thus, $197,900 is the
static budget.
2. A flexible budget is a budget that changes as volume changes. Thus, $110,000 is the flexible
budget.