ECONOMICS

Detailed explanation-1: -Flexible budgets are essentially budgets that can be adjusted depending upon revenue and cost changes throughout the fiscal year, accounting for expected unpredictability. Companies first account for the fixed costs they expect, or at least costs that they don’t expect to change as the year progresses.

Detailed explanation-2: -The flexible budget can be categorized into three different types. These include the basic flexible budget, intermediate flexible budget, and the advanced flexible budget.

Detailed explanation-3: -A fixed budget is a budget that doesn’t change due to any change in activity level or output level. A flexible budget is a budget that changes as per the activity level or production of units. The fixed budget is static and doesn’t change at all.

Detailed explanation-4: -Flexible vs flexed budget Flexible budgeting happens at the beginning of a budgeting period-revenue, costs, and profit are forecast across a range of activity levels. With this information, a flexed budget can then be created at the end of the budget period based on the actual activity level.