Discuss the ways in which management uses flexible budgets
Flexible budgets are important to managers in performing a variety of functions. Formulating budgets commits certain activities agreed to during the planning process to specific monetary amounts. The flexible budget provides the means to estimate costs at various levels of activity. The control function is undertaken to assure that actual operations meet planned operations. Through this function, deviations are determined and variances can be ascertained. Managers also use flexible budgets in performance evaluation. Evaluation is more meaningful with valid and accurate data to make the process of evaluation beneficial to all involved.
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