Flexible Budget Vs. Fixed Budget

Points	Flexible Budget	Fixed Budget
Flexibility	Due to its nature of flexibility, it may be quickly re-organized according to the level of production.	After the commencement of a period, fixed budget cannot change according to actual production.
Condition	Flexible budget may change according to change in conditions.	Fixed budget is based on the assumption that conditions will remain unchanged.
Cost Classification	Classification of costs is done according to the nature of their variability.	It is suitable for fixed costs only; no classification is done in fixed budget.
Comparison	Comparisons of actual figures with revised standard figures are done according to change in the production level of a concern.	If there is change in production level, then it is not possible to do a correct comparison.
Ascertainment of cost	It is easy to ascertain costs even at different levels of activity.	If there is change in the production level or circumstances, it is not possible to ascertain costs correctly.
Cost Control	It is used as an effective tool to control costs.	Due to its limitations, it is not used as cost control tool.