What is fixed budget?

Fixed budget is the budget which is designed to remain unchanged irrespective of volume of output or turnover attained. Fixed budget are based on fixed level of production.

In other words, it is assumed that the various department of entity work at stated level of activity and that a specified production level is going to be achieved and that sales budget will be attained. A fixed budget does not help as a controlling tool. Hence flexible budget are made use of.

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