Difference Between Flexible Budget and Fixed Budget

A fixed budget is a budget that doesn't change due to any change in activity level or output level. The flexible budget is a budget that changes as per the activity level or production of units. The fixed budget is static and doesn't change at all.

1. What is the difference between fixed and flexible?
2. What are fixed budgets?
3. What is a flexible budget?
4. What is flexible budget example?
5. What are the advantages of flexible budget?
6. What is fixed and flexible currency?
7. What are the 3 types of budgets?
8. Why flexible budget is better than fixed budget?
9. What are the two main types of budget?
10. What is flexible budget formula?
11. What does a flexible budget look like?
12. What are three types of flexible expenses?

What is the difference between fixed and flexible?

Fixed exchange rate system is referred to as the exchange system where the exchange rate is fixed by the government or any monetary authority.
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Difference between Fixed and Flexible Exchange Rate.

What are fixed budgets?

A budget that does not take into account any circumstances resulting in the actual levels of activity achieved being different from those on which the original budget was based. Consequently, in a fixed budget the budget cost allowances for each cost item are not changed for the variable items. Compare flexible budget.

What is a flexible budget?

A flexible budget adjusts to changes in actual revenue levels. Actual revenues or other activity measures are entered into the flexible budget once an accounting period has been completed, and it generates a budget that is specific to the inputs.

What is flexible budget example?

This type of budget is most often based on changes in a company's actual revenue and uses percentages of revenue rather than static numbers. For example, a flexible budget may allot 25% of a company's revenue to salary as opposed to allotting $100,000 to salary in a given year.

What are the advantages of flexible budget?

The biggest advantage to a flexible budget is that it more accurately reflects the state of your finances. The alternative, static budgeting, can't account for unexpected expenses or changing income. A flexible budget will help you track where you can adjust spending each month.

What is fixed and flexible currency?

A fixed exchange rate is a rate which is maintained and controlled by the central government. A Flexible exchange rate is a rate which is determined by the market force. ... A flexible exchange rate is controlled by the demand and supply forces.

What are the 3 types of budgets?

There are three kinds of budget -- balanced budget, surplus budget or a deficit budget.

Why flexible budget is better than fixed budget?

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.

What are the two main types of budget?

Four Main Types of Budgets/Budgeting Methods. There are four common types of budgets that companies use: (1) incremental, (2) activity-based, (3) value proposition, and (4) zero-based.

What is flexible budget formula?

To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume. Here, the figure indicates that the variable costs of producing 125,000 should total $162,500 (125,000 units x $1.30).

What does a flexible budget look like?

In its simplest form, the flex budget uses percentages of revenue for certain expenses, rather than the usual fixed numbers. ... Consequently, a more sophisticated format will also incorporate changes to many additional expenses when certain larger revenue changes occur, thereby accounting for step costs.

What are three types of flexible expenses?

Flexible expense examples include groceries, dining out, entertainment, and even utilities.