Flexible Budget - Please provide accurate and appropriately detailed answers....

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Business Finance

Question Description

Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recommend using a static budget over a flexible budget?

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Explanation & Answer

Flexible budgets can be changed but static budgets can't be changed. Static budgets are planned in advance whereas flexible budgets not planned in advance. Flexible budgets have greater level of control which is not in static budget. 

When flexible budget is better: when business is new, economic slow down, when need for change arises. 

When static budget is better: when business is not new, economy recovered from recession, when need for change does not arises. 

juteno (12530)
UT Austin

Really useful study material!