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A budget that adjusts or flexes with changes in volume or activity. Importance: It accommodates changing business conditions and provides more accurate budgeting.

The intentional under-estimation of revenues or over-estimation of expenses when preparing a budget. Importance: Can lead to more easily achievable targets but may also encourage wasteful spending.

A financial plan for a defined period, often one year, that quantifies future financial plans and actions. Importance: Essential for financial planning and control.

A comprehensive financial plan made up of several smaller, detailed budgets that represent a company's financial and operational goals. Importance: It coordinates all aspects of the organization's financial planning.

Costs that vary directly with the level of production or sales volume. Importance: Helps in analyzing the profitability and cost management.

The projection of achievable sales revenue, based on historical sales data, market analysis, and anticipated market changes. Importance: Serves as a foundation for the company's overall budgeting process.

The point at which total costs and total revenue are equal, resulting in no net loss or gain. Importance: Critical for understanding the financial viability of a product or service.

Costs that do not fluctuate with changes in production level or sales volume. Importance: Necessary for calculating break-even point and pricing strategies.

A budget for investments in major assets such as plant, equipment, or property, that will affect the company's long-term operations. Importance: Critical for strategic planning and long-term growth.

The difference between what was budgeted and the actual measured value. Importance: Helps in evaluating performance and making necessary adjustments.

A budgeting method where all expenses must be justified for each new period, starting from a 'zero base'. Importance: It promotes efficient resource allocation.

An estimation of the cash inflows and outflows for a business or individual for a specific period of time. Importance: Vital for ensuring adequate cash flow and liquidity.

A type of budget that continuously updates by adding a new budget period as the most recent budget period is completed. Importance: Ensures that the budget is always current, reflecting the latest data and trends.

A detailed projection of all estimated income and expenses based on forecasted sales revenue during a given period. Importance: Assists in the daily management and planning of a business.

The cycle that a budget goes through, from creation to evaluation. Importance: Ensures that the budgeting process is conducted regularly and remains a central part of the financial planning.

A budget format where each expense is itemized in a line by itself. Importance: Provides simplicity and clear visibility into where funds are allocated.

The process of making predictions of future based on past and present data and analysis of trends. Importance: Critical for informed budgeting, planning, and decision-making processes.

The quantitative investigation of the difference between actual and planned behavior. Importance: Allows an organization to understand the reasons behind budgetary differences and take corrective actions.

A budget that reflects the input of resources and the output of services for each unit of an organization. Importance: Emphasizes deliverables and outcomes, making the budget process more result-oriented.