Budget classification on the basis of flexibility, Financial Management

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ON THE BASIS OF FLEXIBILITY

• Fixed budget: this is designed to stay unchanged irrespective of the volume of output or turnover attained. The budget remains unchanged over a given period and does not change with the change in the volume of production or level of activity attained.

• Flexible budget/ variable budget: it is designed to change along with the changes in the output or turnover. It changes according to the levels of activity.

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