Fixed Budget Flexible Budget Fixed budget is inflexible and does not change with the actual volume of output achieved. Flexible budget can be suitably recasted quickly according to level of activity attained. Fixed budget assumes that conditions would remain static. Flexible budget is design to change according to changed conditions. Costs are not classified according to their variability i.e. fixed, variable and semi variable. Coasts are classified according to the nature of their variability. Comparison of actual and budgeted performance cannot be done correctly if the volume of output differs. Comparisons are realistic as the changed plan figures are placed against actual ones. It is difficult o forecast accurately the resultsin it. Flexible budget clearly shows the impact of various expenses on the operational aspects of the business. Only one budget at a fixed level of activity is prepared due to an unrealistic expectation on the part of the management Series of budgets are prepared at different level of activities. Fixed budget has a limited application and is inefficient as a tool for cost control. Flexible budget has more application and can be used as a tool for cost control. If the budgeted and actual activity levels vary, the correct ascertainment os coasts and fixation of prices becomes difficult. Flexible budget helps in fixation of prices and submission of tenders due to correct ascertainment of coasts.
is a plan for a single level of production, whereas a flexible budget can be converted to any level of production.
there are some difference among activity based flexible budget and conventional fllexible budget, the main differ is number of cost driver that use to allocat OHC, so my dissertation about this subject
true
Here are the differences between the two: Flexible Budget-A flexible budget is a budget that adjusts or flexes for changes in the volume of activity. The flexible budget is more sophisticated and useful than a static budget, which remains at one amount regardless of the volume of activity. Rolling Budget-Method in which a budget established at the beginning of an accounting period is continually amended to reflect variances that arise due to changing circumstances. Hope this helps!
Actual sales (quantity ) = flexible budget sales (quantity ) , because the flexible budget is prepared based on the actual activity level (units sold ) to avoid misleading of compering the static budget sales and actual sales
is a plan for a single level of production, whereas a flexible budget can be converted to any level of production.
there are some difference among activity based flexible budget and conventional fllexible budget, the main differ is number of cost driver that use to allocat OHC, so my dissertation about this subject
true
Here are the differences between the two: Flexible Budget-A flexible budget is a budget that adjusts or flexes for changes in the volume of activity. The flexible budget is more sophisticated and useful than a static budget, which remains at one amount regardless of the volume of activity. Rolling Budget-Method in which a budget established at the beginning of an accounting period is continually amended to reflect variances that arise due to changing circumstances. Hope this helps!
Actual sales (quantity ) = flexible budget sales (quantity ) , because the flexible budget is prepared based on the actual activity level (units sold ) to avoid misleading of compering the static budget sales and actual sales
fixed budget is prepared at the start of the period and flexible budget is prepared at the end of period it is adjusted from current activity level of company...
There is no difference between them.. Their difference only is how you understood about financial budget.. :)
Fixed or Static buget is for a particular activity level. Flexible budget is for a range of activity level. Differentiate between Fixed and Flexible budget ? Needs a complete answer.
iiiustrate by means of a diagram the budget planning process show clearly the difference between a functional budget and a financial budget
flexible budget and actual results
A budget "variance" is the difference between planned and actual performance.
A budget "variance" is the difference between planned and actual performance.