Mention the Steps in Flexible Budgeting

The following steps (stages) are involved in developing a Flexible budget:

1. Decide the range of activity to which the budget is to be prepared.

2. Determining the cost behavior patterns (fixed, variable, semi-variable) for each element of cost to be included in the budget.

3. Selecting the activity levels (generally in terms of production) to organize budgets at those levels.

4. Preparing the budget at each activity level selected by associating the activity level with corresponding costs. The corresponding costs to be attached with each activity level are determined in terms of their behavior, i.e. fixed, variable and semi variable.)