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What are fixed and flexible budgets?

Updated: 12/20/2022
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Q: What are fixed and flexible budgets?
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If you have actual how do you get flexible budget?

Flexible budgets are prepared for different capacity levels like normal capacity, optimistic capacity and pesimistic capacity based on actual budgets.


What is advantages of fixed budgets?

A fixed budget will help businesses manage finances. With a fixed budget managers will not have the ability to spend extra funds.


What is flexible 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.


What is the difference between governmental annual operating budgets and capital budgets?

annual operating budgets include estimated revenues and appropriations for expenditure for a specific fiscal year. Capital budgets control the expenditures for construction projects and fixed asset acquisitions


How do flexible expenses differ from fixed expense?

Flexible expenses vary over time.


How do flexible expenses differ from fixed expenses?

Flexible expenses vary over time.


Is it best to choose an activity measured in dollars when choosing an acitivy measure for flexible budgets?

The activity base should not be expressed in dollars or other currency. For example, direct labor cost is usually a poor choice for an activity base in flexible budgets. Changes in wage rates affect the activity base but do not usually result in a proportionate change in overhead. Therefore, it is normally best to use physical, rather than financial, measures of activity in flexible budgets..Answer - NO


What is the Advantages of fixed budgets?

fixed budget is the budget whose all estimation is not changed after making this type of budget for more knowledge of budget == == == == == ==


What is the difference between fixed and flexible automation?

Flexible automation ; You have to consider it when you need low production rate, varying in demand and shot product cycle. As you see the difference between these two automation's name Flexible automation has flexibility to deal with design variations. Fixed automation ; In the opposite of Flexible automation should be consider when you have high demand volume and long product cycles. The product unit of fixed automation is more cheaper than the one which made in flexible manufacturing system.


Is it advisable to get a fixed mortgage or flexible rate?

Fixed mortgages tend to be better because the price always remains constant while flexible mortgages tend to increase over time which can be a strain.


The main difference a flexible budget and a static budget is that a flexible budget does not contain fixed costs true or false?

true


Explain difference between fixed and flexible budget?

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.