In developing a flexible budget within a relevant range of activity
A) only fixed costs are included.
B) it is necessary to relate variable cost data to the activity index chosen.
C) it is necessary to prepare a budget at 1000 unit increments.
D) variable and fixed costs are combined and are reported as a total cost.

Question

Quizplus · Accepted Answer

In developing a flexible budget within a relevant range of activity, it is necessary to relate variable cost data to the activity index chosen. This is because variable costs vary depending on the level of activity, and the budget should reflect this relationship.

In Developing a Flexible Budget Within a Relevant Range of Activity