A budget based on several different levels of activity, often including both a best-case and worst-case scenario, is called a:
A) Rolling budget.
B) Merchandise purchases budget.
C) Fixed budget.
D) Production budget.
E) Flexible budget.

Question

Quizplus · Accepted Answer

A budget that is flexible and can adjust to changes in levels of activity is called a flexible budget. This type of budget often includes multiple scenarios or levels of activity, such as best and worst case, and can be adjusted accordingly. Rolling budgets refer to budgets that are updated and revised periodically throughout the year, while merchandise purchases, fixed, and production budgets are all specific types of budgets that may or may not include different levels of activity.

A Budget Based on Several Different Levels of Activity, Often