Discuss flexible budget and its implications . 1 answer below »

I Need to write a 200-300 word response to the following: What is a flexible budget? What are the steps to developing a flexible budget? What information is found on a flexible budget report? How is that information used to evaluate performance?

1 Approved Answer

Subhrata R
4 Ratings, (9 Votes)
Answer: Flexible budget is one which by recognizing different cost behavior patterns is designed to change as volume of output changes. It is a budget prepared in a manner so as to give the budgeted cost for any level of activity. It is a budget which by recognizing the difference between fixed, semi-fixed and variable cost is designed to change in relation to the activity attained. It is designed to furnish budgeted cost any level of activity attained. Flexible budget is prepared by following methods: a. Tabular method or multi-activity method b. Formula method or ratio method c. Graphic method Flexible budget shows the expenditure appropriate to various levels of output.If the volume changes the expenditure appropriate to it can be established from the flexible budget for comparison with actual expenditure as a means of control. It provides a...

Related Questions

Recent Questions in Managerial Accounting

Submit Your Questions Here !
Copy and paste your question here...
Attach Files