Static budget is prepared for only one level of production volume, and also called as master budget.
Flexible budget is a summarized budget that can easily be computed for several different production volume levels, which separate variable costs from fixed costs.
Below are links containing a lot of information which would be useful for you to grasp the concepts of and the relationship between flexible and static budget.
http://www.ehow.com/info_7784641_static-budget-vs-flexible-budget.html
http://www.accountingtools.com/questions-and-answers/what-is-a-static-budget.html
http://www.accountingtools.com/questions-and-answers/what-is-a-flexible-budget.html
http://www.investopedia.com/articles/07/budgetingforcompanies.asp
Materials in respect of variances presented in IMA learning system can give you a good grasp about this topic. Before going into the study of variance topic, you must clearly tackle above two types of budget, their concepts and applications etc. since there are lot of variances in relation to flexible budget, and static budget as well, which are applicable to labor, materials, MOH and Fixed OH and so on.
On the other hand, I don't have any idea about "Applied cost", which seems not to be a technical term used in MA. Where did you come across this term?
This answer may not be quite up to your expectation! Sorry!
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Kam Sing LEUNG CFP, CPA, FCCA
Controller
Total Solution Consultancy (Hangzhou) Limited
Hangzhou
China
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Original Message:
Sent: 05-27-2013 01:08 PM
From: Chadi Ghaith
Subject: Difference between Flexible, Static and Applied budget
Dear all, hope I can get a clear answer for the below.
I need help to understand the difference between Flexible, Static and Applied budgets and costs. I am actually studying for CMA Exam Part 1 and I'm a little confused between the usage of those for Variance calculations. When are Applied costs relevant in the calculations?
Thanks for your help,
Chadi