Is a flexible budget a poor benchmark?

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In a stagnant world, an unchangeable budget would be a good idea, but the business world is always changing in respect to the total markets and to the piece of the market cornered by a company. A static budget presumed that management had the insight and the knowledge to accurately forecast market conditions to some point in the future. Managers would like to be exactly correct with their forecasting, but unforeseen conditions can modify the best of plans.

There is some truth in staying with a budget provided the basic elements on ...