Performance measurement: Budgetary control

Question 1

What is a Fixed budget ?

Answer 1

Is a budget that is prepared ahead of the start of the budget period and is based on one level of activity.

Question 2

What is a Flexible budget ?

Answer 2

Is a budget which recognizes different cost behavior patterns and is designed to change as volume of activity changes.

Question 3

What is a Flexed budget ?

Answer 3

Is a budget that is prepared at the End of the budget period and based on ACTUAL level of activity.