What is the difference between fixed and flexible budgets?
- Both types are similar in nature
- Fixed budgets are ideal for dynamic environments
- Fixed budgets remain constant regardless of activity levels
- Flexible budgets adjust based on activity levels
The key difference between fixed and flexible budgets lies in their adaptability to changes in activity levels. Fixed budgets remain constant regardless of activity levels, whereas flexible budgets adjust based on changes in activity, providing more accurate cost projections.
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