The flexible budget is a dynamic tool, in that a budget can be constructed to compare to any level of actual costs within the relevant range

Question

Quizplus · Accepted Answer

The statement is true. A flexible budget is a tool that allows for adjustments to be made to budgeted amounts based on changes in the level of activity. This means that the budget can be adapted to fit the actual costs within the relevant range. Advantages of the flexible budget approach include providing more accurate cost and revenue projections, aiding in decision-making, and allowing for better performance evaluation.

The Flexible Budget Is a Dynamic Tool, in That a Budget