crossorigin="anonymous"> Distinction between Fixed budget and Flexible Budget best 1

Distinction between Fixed budget and Flexible Budget

Distinction between Fixed budget and Flexible Budget
Distinction between Fixed budget and Flexible Budget

Distinction between Fixed budget and Flexible Budget

Fixed Budget:- It cannot be changed with the volume of activities.
Whereas 
Flexible Budget:- It can be changed with the volume of activity.
Fixed Budget:- All costs are concerned with one level of activity only.
Whereas
Flexible Budget:- It involves classifications of costs by their behaviour. As fixed costs and variable costs.
Fixed Budget:- Cost ascertainment does not provide a correct result if budget and actual activity levels vary.
Whereas
Flexible Budget:- But with the help of a flexible budget we can determine Selling price of a product.
Fixed Budget:- Ascertainment of costs is not possible in fixed costs.
Whereas
Flexible Budget:- Costs can be ascertained easily at different levels of activity.
Fixed Budget:- It has limited application for cost control.
Whereas
Flexible Budget:- It has more application and can be used as a tool for effective cost control.
Fixed Budget:- It is rigid budget and based on the assumption that conditions would remain constant.
Whereas
Flexible Budget:- It can be changed according to the changed conditions.
Fixed Budget:- Here it will be difficult to compare actual and budgeted performance cannot be done correctly because production volume is different.
Whereas
Flexible Budget:- Here Comparison are realistic according to change in the level of activity.
Fixed Budget:- Costs are not classified as fixed costs, variable costs and semi-variables.
Whereas
Flexible Budget:- All Costs are classified as per the nature of their variability.
Distinction between Fixed budget and Flexible Budget

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