This is defined as a budget which is designed to remain unchanged irrespective of the volume of output or turnover attained.

This budget will, therefore, be useful only when the actual level of activity corresponds to the budgeted level of activity.

turnover or other variable factors such as number of employees. is designed to change appropriately with such fluctuationsµ. by recognising the difference in behaviour between fixed and variable costs in relation to fluctuations in output. .FLEXIBLE BUDGET: CIMA defines this budget as one ´ which.

90% and 100%. 4 per unit (40% variable) In case the budgeted levels of activity are 80%. 3 per unit Semi-variable Rs. and the costs at this level are as follows: Fixed Rs.Flexible budget A company produces 1. . prepare the flexible budget.000 Variable Rs. 5.000 units at 100% capacity.

of units Fixed cost Variable cost Semi variable : fixed : Semi variable : variable Total cost : 100% 90% 1000 5000 3000 2400 1600 900 5000 2700 2400 1440 80% 800 5000 2400 2400 1280 12000 11540 11080 .Solution« (flexible budget) particulars No.

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