Flexible budgets are synonymous with rolling budgets. Do you agree or disagree and$$ why?

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Part $1$

A$.$

I do not agree. A flexible budget is a budget that only takes some data into account. A flexible budget will calculate a high level quarterly budget that anticipates historical changes over a period of several quarters. This is helpful to management when trying to determine hiring and firing of seasonal employees. A rolling$$ budget, by$$ contrast, will look at weekly differences of sales and as they$$ increase, management will hire more employees to cover the demand.

B$.$

I do agree. A flexible budget as well as a rolling budget are both budgets that constantly update data based on actual results as they are known. Both of these budgets anticipate changes in sales through$$ demand, which allows management to increase or decrease supplies and keep inventory down. They also both put historical data on a monthly roll forward period.

C$.$

I do not agree. A flexible budget is kept updated constantly for any period that is completed during the fiscal period. As actual data becomes$$ available, the flexible budget is updated with the data to allow for management to calculate profit and get a better understanding of cash flow. Whereas a rolling budget is a mix of historical financial data and future cash flows which is helpful to management when trying to anticipate supply and demand of products.

D$.$

I do not agree. A flexible budget is a budget that changes as a result of a change in activity level. A flexible budget calculates what costs and income$$ "should be$"$ in relation to changes in sales volume and can also be very helpful to management when trying to anticipate how a change in sales will affect profitability and cash flows. A rolling forecast constantly updates the data for the number of periods$$ covered, such as $12$ months. As a month passes and the actual results are$$ known, the forecast is updated to include the$12-$month period, beginning with the new month.