With a flexible budget a manager can determine what costs should have been attained at a given level of activity.

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A flexible budget is a budget that adjusts the projected or planned budget for actual changes in output levels. A manager can use this approach to determine what costs should be attained at a given level of activity. The advantages of a flexible budget include providing a more accurate and realistic estimate of costs based on actual production levels, allowing for better decision-making and control, and helping to identify areas of potential cost savings or inefficiencies. In contrast, a fixed budget assumes a constant level of output regardless of actual production levels, which can lead to incorrect cost estimates and poor decision-making.

With a Flexible Budget a Manager Can Determine What Costs