All 34 Flexible Budgets questions
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What is a flexible budget? Why is a fixed budget misleading for performance comparison? What is the relevant range and why does it matter for flexible budgets? What is the purpose of a flexible budget in performance evaluation? How do fixed costs behave when a budget is flexed? What activity measure should be used to flex a budget? How does a flexible budget improve on a fixed budget for cost control? What is meant by 'flexing' a budget? Give a simple example of flexing a budget. What is the allowed cost (budget allowance) in flexible budgeting?
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What is the difference between a flexible budget and a rolling budget?

Beginner

Answer

A flexible budget adjusts costs to the actual activity level for a given period (a control tool for a fixed timeframe). A rolling budget extends the budget period by continuously adding new periods (a planning-horizon tool). They address different problems—flexing for volume, rolling for time—and can be used together.
Real-world example The team flexes each month's budget to actual output and also rolls the 12-month horizon forward.

Common follow-ups: What does each adjust for? | Can they be used together?

Rolling Forecasts Types of Budgets Flexible Budgets
All 34 Flexible Budgets questions