This document discusses and compares fixed and flexible budgeting. It defines fixed budgets as budgets that remain unchanged regardless of activity levels, while flexible budgets change based on different activity levels. Fixed budgets are simpler to prepare but do not account for changes, while flexible budgets are more complex but can adjust for fluctuations. The document provides characteristics, advantages, and differences between the two budget types to analyze which approach is more useful for a business. It ultimately concludes flexible budgeting is preferable as it can adapt to changing business conditions.