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Under what conditions is a flexible budget likely to be

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Under what conditions is a flexible budget likely to be more effective than a forecast budget?

HelloCustomer

A forecast budget works well when everything is predictable. You can look at past expenses and get a good idea what future expenses will be.

However, if your business or product is seasonal with ups and downs in production or sales, then a flexible budget works best. This allows more flexibility within the budget, as well as more control throughout the year as to how the budget is working and where changes are needed.

Here's a link that you may find helpful also.
http://www.middlecity.com/ch23.shtml

I hope you find this helpful and will accept my answer. If you need something more, please let me know.

Customer: replied 9 years ago.
Reply to AnswerQuest's Post: Good Answer; however I need a little more details to clarify.

Hello

The variable or flexible budget (also called a dynamic budget), is an effective evaluative tool for a company that frequently experiences variations in sales volume that strongly affect the level of production. In these circumstances a company initially constructs a series of budgets for a range of production volumes that it can reasonably and profitably meet.

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AnswerQuest, Homeschooler
Category: Homework
Satisfied Customers: 233
Experience: Homeschool teacher, love to do research, avid news website reader, love history and facts
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