The usefulness or importance of a flexible budget depends very much on the accuracy of the classification of expenses into fixed, semi-fixed and variable ones. The important advantages of flexible budget are as follows:
* A flexible budget enables the management to analyze the deviation of actual output from expected output.
* The management can compare actual costs at the actual volume with the budgeted costs at the actual volume.
* The flexible budget provides a correct basis for comparison between actual and expected costs for an actual activity.
* Flexible budget helps to fulfill the objectives of cost control as it shows where the actual performance deviated from the planned performance.
* A flexible budget enables the management to analyze the deviation of actual output from expected output.
* The management can compare actual costs at the actual volume with the budgeted costs at the actual volume.
* The flexible budget provides a correct basis for comparison between actual and expected costs for an actual activity.
* Flexible budget helps to fulfill the objectives of cost control as it shows where the actual performance deviated from the planned performance.