Flexible budgets are powerful control tools because
A) they allow managers to deal with uncertainty.
B) they allow the calculation of what cost should be for the actual level of activity.
C) they allow the preparation of meaningful performance reports.
D) they help measure managerial efficiency.
E) All of these.

Question

Quizplus · Accepted Answer

Flexible budgets provide managers with an effective tool to control costs and manage uncertainties that may arise. By providing a calculation of cost for the actual level of activity, managers can make informed decisions to control costs and improve efficiency. Additionally, flexible budgets allow the preparation of meaningful performance reports as they provide a benchmark to compare actual results. Overall, flexible budgets provide a comprehensive approach to measuring managerial efficiency and addressing the challenges of uncertainty.

Flexible Budgets Are Powerful Control Tools Because