Question

Differentiate among various types of budgets: fixed, variable, capital budgets

Answer 1

Here I am comparing all three type of Budgets

Fixed Budget	Variable Budget	Capital Budget
Remain constant	May Change with Time	Budget for long term fixed Assets
Also known as Static Budget	also Known as Flexible Bugdet	also Known as Long term budget
This budget is estimated by future assumption which may be depend on past activity.	it is flexible so budget is change with activities (present situation).	it is difficult to estimate but estimated by assumption of expenditure as well as observing past similiar expenditure
Example : in a educational institution budget for the salary of employees (including teachers) can be fixed since salary is fixed and increment can also be predict easily. So fixed budget is prepared for this purpose.	in the same institute bills of various expenditure can not be predict as accuretly as salary. Such as bill of electricity, water supply, consumable items so variable budget for those are prepared. Which is hard task.	for establishment of a educational institute a capital budget is sanctioned for a long period. For construction of building and infrastructure s. Where the actual expenditure and budget can be different.