Which one of the following is true of a flexible budget?
A)It is prepared when managers are unsure of activity levels.
B)It projects budget data at a pre-planned level of activity.
C)It is useful in controlling variable and fixed costs.
D)It shows no differences between actual and budgeted amounts because it is prepared after the actual results are determined.

Question

Quizplus · Accepted Answer

A flexible budget adjusts costs based on changes in actual activity levels, making it useful for controlling both variable and fixed costs by showing how costs should scale with activity levels.

Which One of the Following Is True of a Flexible