|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.
|Flexible budget may change according to change in conditions.
|Fixed budget is based on the assumption that conditions will remain unchanged.
|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.
|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.
|It is used as an effective tool to control costs.
|Due to its limitations, it is not used as cost control tool.