Question & Answer: what is a flexible budget? As a manager, why would you prefer the flexible budget?…..

A Flexible budget is a budget that is prepared with in a range of activities or volumn of activity in otherwords it can be also called as varible budget or dynamic budget or step budget. This budgets which are allowed expenditure on variable costs that can be increased or decreased as the level of activity changes

Flexible budget that can help managers to make overall and correct comparison and it is desined to show that expected revenue and allowed expenditure for an actual number of units sold in a given period of time.

The manager should pefer the flexible budget with the actual expenditure and revenue and it is possible to distinguish with the efficiencies.

It can be peferred by using in variable cost environment, performance measurement, budgetting efficiency