Managerial Accounting -- Budgeting 1 &

(1) Is this a static or flexible budget?

Since many of the budget line items are based on student enrollment, this budget format is considered to be a flexible budget. The costs of providing instructors and associated benefits is fixed by the state with regard to the ratio of students to teachers, and students per classroom (which is more a function of fire codes and building codes, but it is still a determinant with regard to budget flexibility). The expenses associated with the school facility are fixed and generally cannot deviate in response to increases or decreases in enrollment. Personnel and plant costs are two major items in the school budget, and neither provides options for flexibility. That said, much of the proposed budget is based on student enrollment scenarios -- of which there are three at 120 students, 100 students, and 66 students....
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