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Budgeting (FINA425- Unit 2 - Discussion Board

Assignment Details

Various types of budgets facilitate understanding about the big picture of a business. There are budgets that are set and unchangeable, as well as budgets that allow for variability.

  • Explain 2 different types of budgets and discuss how they complement each other.

  • What is the difference between a flexible budget and a static budget? Which one do you believe works better for a business you have worked for or about which you are familiar?

In your replies to others, share your knowledge and experiences with a specific type of budget. Include whether the budget was flexible or static.

In this post, I will be discussing sales/marketing budgets and production budgets. In this unit's M.U.S.E. lesson, we learned that sales/ marketing budgets are used to increase sales while budgeting the marketing program. In M.U.S.E. it states "It considers many aspects, which directly or indirectly are to achieve target sales and concentrates on advertisements, propaganda, transportation, and other associated factors increasing the sales, causing more traffic to and increasing awareness of the organization." (M.U.S.E., 2022). Production budgets help with setting a budget for labor, materials, and cost of units (goods) to meet goals. In M.U.S.E., it states "This budget concentrates on setting up new production units and hiring efficient laborers so the production meets its predetermined sale target and reaches a remarkable level." (M.U.S.E., 2022). Both sales/ marketing and production budgets complement one another because both have to do with budgeting products, capital, and other spending costs for the company. The marketing team would need to know how valuable the product is to advertise it effectively.

A flexible budget will show real-time values of a business's expenses and revenues. A flexible budget also shows an outline of a forecast for a business. A static budget is planned ahead of time rather it is monthly or quarterly in a year compared to a flexible budget. I feel because I work for an optometrist, a flexible budget is more effective due to having to pay for things spontaneously. We have to upgrade instruments when they go down, purchase contact lens trails as we run out, drops and solutions, and mostly keep up with purchasing new frames. Although, I do believe depending on the type of business will depend on rather. a flexible or static budget would work best.

Thank you for reading.


  • Bigelow, L. (2019, February 4). Static vs. flexible budgets for new businesses. Small Business - Retrieved May 20, 2022, from

  • Types of budgets. Asset Page Types of Budgets. (2022). Retrieved May 20, 2022, from

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