Flexible Budget and Overhead Analysis

A flexible budget is a budget that adjusts or flexes for changes in the volume of activity. The flexible budget is more sophisticated and useful than a static budget, which remains at one amount regardless of the volume of activity. This is a tutorial study based lecture. Here explains how flexible budgets can be used to control variable and fixed overhead costs. Here also prepare a flexible budget and explain the advantages of the flexible budget approach over the static budget approach.