| 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. |
