On the one hand, it can adapt to the changes of different business activities, expand the scope of the budget, better play the control role of the budget, and avoid frequent revision of the budget when the actual situation changes.

On the other hand, the evaluation and assessment of the actual implementation of the budget can be based on a more objective and comparable basis.

This method is suitable for all kinds of project expenditures that change with the business volume, such as the goods procurement project of the school. Because the enrollment scale of students has changed greatly, the number of desks and chairs, beds, teaching buildings and other procurement items can be calculated according to the enrollment number and the number of students in the budget year.

In management, flexible budget is mainly used to prepare cost budget and profit budget.

Extended data

The steps of compiling flexible budget are as follows:

① Select and determine the unit consumption, working hours and machine hours of various business activities.

(2) Forecast and determine the possible business volume of various business activities. When determining the business volume of economic activities, it should be coordinated with various business departments. Generally, it can be determined in the range of 70%- 120% of the normal business activity level, or it can be divided into several grades according to the minimum business volume and the maximum business volume in the past historical data, so that the compiled flexible budget is more realistic.

(3) According to the dependence between cost behavior and business volume, the production cost of an enterprise is divided into variable cost and fixed cost, and the relationship between each expense and business volume is determined item by item.

④ Calculate the forecast data under various traffic levels and express them in a certain way to form a certain flexible budget.

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