A flexible budget prepared before the period begins allows management to make adjustments to increase profits or decrease losses. This is because it provides the opportunity to plan and adjust for various outcomes, and to respond to changes in the business environment or market conditions. Here are the steps:

1. Identify the fixed and variable costs: Fixed costs do not change with the level of output, while variable costs do.

2. Prepare the budget: Based on the identified costs, prepare a budget that outlines expected revenues, costs, and profits.

3. Adjust the budget as necessary: As the period progresses, compare actual results with the budgeted figures. If there are significant differences, adjust the budget accordingly.

4. Review and revise: At the end of the period, review the budget and the actual results. Use this information to prepare the budget for the next period.

By preparing a flexible budget before the period begins, management can be proactive rather than reactive, making adjustments to increase profits or decrease losses as necessary.

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A flexible budget prepared before the period begins allows management to make adjustments to increase profits or decrease losses. This is because it provides the opportunity to plan and adjust for various outcomes, and to respond to changes in the business environment or market conditions. Here are the steps:

1. Identify the fixed and variable costs: Fixed costs do not change with the level of output, while variable costs do.

2. Prepare the budget: Based on the identified costs, prepare a budget that outlines expected revenues, costs, and profits.

3. Adjust the budget as necessary: As the period progresses, compare actual results with the budgeted figures. If there are significant differences, adjust the budget accordingly.

4. Review and revise: At the end of the period, review the budget and the actual results. Use this information to prepare the budget for the next period.

By preparing a flexible budget before the period begins, management can be proactive rather than reactive, making adjustments to increase profits or decrease losses as necessary.

Knowee AI · Accepted Answer

A flexible budget prepared before the period begins allows management to make adjustments to increase profits or decrease losses. This is because it provides the opportunity to plan and adjust for various outcomes, and to respond to changes in the business environment or market conditions. Here are the steps:

1. Identify the fixed and variable costs: Fixed costs do not change with the level of output, while variable costs do.

2. Prepare the budget: Based on the identified costs, prepare a budget that outlines expected revenues, costs, and profits.

3. Adjust the budget as necessary: As the period progresses, compare actual results with the budgeted figures. If there are significant differences, adjust the budget accordingly.

4. Review and revise: At the end of the period, review the budget and the actual results. Use this information to prepare the budget for the next period.

By preparing a flexible budget before the period begins, management can be proactive rather than reactive, making adjustments to increase profits or decrease losses as necessary.

A flexible budget prepared (before/after) the period begins allows management to make adjustments to increase profits or decrease losses.

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