Flexible budgets for performance evaluation

Why is the flexible budget appropriate for evaluation of performance? Is there any reason why a company should prepare a static budget since its poorly suited for evaluating performance?

© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/flexible-budgets-for-performance-evaluation-7fif

Solution Preview

...ontrolled for a specific period. However, if the actual and planned level of activities do not equal the same amount then this budget becomes very difficult to use to evaluate performance.

Flexible budgets are used by companies with various levels of activity. It provides date for the different levels of ...