What is Fixed budget

The fixed budget is prepared for a given level of activity the budget is prepared before the beginning of the financial year. If the financial year starts in January then the budget will be prepared a month or two earlier, i.e., November or December. The change is expenditure arising out of the anticipated changes will not be adjusted in the budget. There is a difference of about twelve months in the budgeted and actual figures. According to I.C.W.A, London, fixed budget is a budget which is designed is suitable under static conditions. If sales expenses and cost can be forecasted with greater accuracy then this budget can be advantageously used.