Fixed budget is more useful than a flexible budget
Fixed and flexible budgets are two separate but interconnected parts of a solid accounting regime of a business. Fixed budgets are a good way to keep track of production costs, and motivate the personnel in charge of the purchases to make the best possible effort to obtain the required goods at the lowest possible price. A flexible budget sometimes justifies the entire budget of a company; however, it is better if it is used as part of a broader general budget in a subdivision role, such as a variable expense account.
Explanation of Fixed budget –
A Fixed budget is generally used as a projection tool to estimate business expenses within a stipulated period. The discrepancies that result from the fluctuating cost of raw materials or errors in the initial elaboration of the budget appear in the Fixed budget as variants of the Fixed budget. When accounting for the end of the actual expenses of a production cycle, the variants of the Fixed budget must be combined with the initial real Fixed budget in order to achieve a correct financial report. It can simply help to think of a Fixed budget as a projection budget.