Answer on Other Management Question for Iyyappan
A flexible budget calculates different expenditure levels for variable costs, depending upon changes in actual revenue. The result is a budget that varies, depending on the activity levels experienced. You input the actual revenues or other activity measures into the flexible budget once an accounting period has been completed, and it generates a budget that is specific to the inputs.
In short, a flexible budget gives a company a tool for comparing actual to budgeted performance at many levels of activity.
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