21 November 2025

What is a Flexible Budget?

A flexible budget is a budget that changes (flexes) according to the actual level of activity (e.g. units produced, units sold, machine hours, labour hours).

Static budget 
= based on one activity level

Flexible budget 
= can be prepared for many activity levels 
(e.g. 5,000 units, 6,000 units, 7,000 units)

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