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.
A Flexible budget is a budget that is adjusted to the actual level of activity. It is the best estimate of what revenues and costs should have been, given the actual level of activity during the period.
Mar 31, 2019 · A flexible budget is one that is adjusted for volume levels, such as volume of activity. An initial budget is based on an anticipated volume of activity. In preparing the budget, one could also prepare alternative budgets based on a range of possible volume outcomes.
Feb 19, 2021 · Nucor’s Flexible Budget According to Harold (2020), a flexible budget is a budget that accommodates adjustments with changes in volume or activity. Even though it is more sophisticated, it is more useful than a static budget (Harold, 2020).
A flexible budget is one based on different volumes of sales. A flexible budget flexes the static budget for each anticipated level of production. This flexibility allows management to estimate what the budgeted numbers would look like at various levels of sales.
A flexible budget is a budget that adjusts or flexes with changes in volume or activity. The flexible budget is more sophisticated and useful than a static budget. (The static budget amounts do not change. They remain unchanged from the amounts established at the time that the static budget was prepared and approved.)
A flexible budget is one that is allowed to adjust based on a change in the assumptions used to create the budget during management's planning process. A static budget, on the other hand, remains the same even if there are significant changes from the assumptions made during planning.Feb 27, 2016
A flexible budget is prepared after making an intelligent classification of all expenses between fixed, semi-variables and variable because the usefulness of such a budget depends upon the accuracy with which the expenses can be classified.
The flexible budget can be used for the determination of budgeted sales, costs, and profits at different activity levels. It helps the management to decide the level of output to be produced in order to generate profits for the business based on budgeted cost at different activity levels and budgeted sales.
Flexible, rolling budgets empower entrepreneurs to cope with change. This nimble planning process lets you adjust spending throughout the year; benefits include less overspending, more opportunities and speedier responses to changing market and business conditions.Aug 31, 2020
How to create a flexible budgetIdentify which costs are variable and which costs are fixed. Fixed costs typically include expenses such as rent and monthly marketing costs. ... Divide the budget. ... Create your budget with set fixed costs. ... Update the budget. ... Input and compare.Mar 15, 2021
When your budget is flexible, you may express costs as percentages and adjust according to actual revenue. For example, a company using a static budget may allot £100,000 to salary over a year. Instead of this, flexible approaches to budgeting may allot 25% of the company's revenue to salary instead of a fixed cost.Dec 7, 2021
Main Features of Flexible BudgetThe flexible budget covers a range of activities,A flexible budget is easy to change according to variations of production and sales levels.Flexible budget facilitates performance measurement and evaluation.It takes into account the changes in the volume of activity.More items...