Question 1. Projected Sales is a budgeting technique to help companies project the budget for a future term. What happens if this figure is significantly wrong? How does a company determine if this figure is accurate? What other budgets depend on the accuracy of this number? Why?
Question 2. What is the difference between a flexible and static budget? When should a company employ one of these specific types of budget? Is there a benefit in being so specific in the budgeting process? What are the benefits of this type of budgeting? In your opinion, what are the drawbacks of not using these types of budgets? Give an example to support your response.