What information is found on a flexible budget report?


Quick Answer

The information found in a flexible budget report includes expenditure levels for variable costs and tools for comparing actual to budgeted performance. This budget is dependent upon changes in revenue and activity levels experienced.

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Full Answer

The flexible budget is useful in businesses where costs and level of business activity are closely aligned. An example of this is segregating overhead costs as a fixed cost and the cost of merchandise as a direct link to revenue.

Performance measurements can also be found in a flexible budget. These budgets are great for evaluating performance because it restructures itself based on activity levels. Likely financial results at a wide range of activity levels are also in this type of report.

Approved fixed expenses and variable expenses that are a proportion of revenues and activity levels are found in a flexible budget. Expenditure levels altered from the remainder of the budget are in this report as well.

Basic, intermediate and advanced are the three types of flexible budgets. The basic flexible budget alters expenses that vary with revenues. Intermediate budgets integrate other activity measures into the budget model. Advanced models only allow for variances within certain ranges of revenue or other activities. A different proportion of expenditures can apply outside of those ranges.

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