Characteristics Of Flexible Budget And Steps To Be Followed For Preparing A Flexible Budget

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The important characteristics of flexible budget can be pointed as follows:

* Flexible budget covers a range of activities

* Flexible budget is easy to change according to variations of production and sales levels.

* Flexible budget facilitates performance measurement and evaluation.

* It takes into account the changes in the volume of activity.

* Flexible budget replaces a static budget for control.

Steps To Be Followed For Preparing A Flexible Budget:

* To decide the range of activities for which the budget is to be prepared.

* To determine the cost behavior i.e. fixed, variable or semi-variable.

* To select the activity level for preparing the budget.

* To prepare flexible budget at each selected levels.

Related Topics
Concept And Meaning Of Flexible Budget
Importance Or Advantages Of Flexible Budget
Difference Between Static Budget And Flexible Budget
Preparation Of Flexible Budget Using Formula Approach

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