Professional Documents
Culture Documents
Fixed and Flexible Budgeting
Fixed and Flexible Budgeting
These types of budgets are prepared on the basis of activity level of utilization of capacity.
Fixed Budget :- A fixed budget is a budget designed to remain unchanged irrespective of the level of
activity actually attained.
A fixed budget shows the expected results of a responsibility center for only one activity level.
Flexible Budget :- A flexible budget is a defined as a budget which, by recognizing the difference
between fixed, semi-variable and variable costs is designed to change in relation to the level of
activity attained.