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Flex vs Fixed

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Explain how a fixed cash budget differs from a variable or flexible cash budget.

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Solution Summary

A Flexible budget is based on different levels of activity. It is an extremely useful tool for comparing the actual cost incurred to the cost allowable for the activity level achieved. It is dynamic in nature rather than static. By using the Cost-Volume Formula (or Flexible Budget Formula), a series of budgets can be developed easily for various levels of activity.

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A Flexible budget is based on different levels of activity. It is an extremely useful tool for comparing the actual cost incurred to the cost allowable for the activity level achieved. It is dynamic in nature rather than static. By using the Cost-Volume Formula (or Flexible ...

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