Fixed costs are usually included in ________ budgets,but they remain the same total amount within the relevant range of activity regardless of the output level chosen to 'flex' the variable costs and revenues.
A)static
B)activity
C)flexible
D)monthly

Question

Quizplus · Accepted Answer

Fixed costs are included in flexible budgets because they do not change with changes in output level. In contrast, variable costs and revenues will change with changes in output level, so they are included in flexible budgets to account for such changes. Static budgets are prepared based on a single level of activity and do not account for changes in output. Monthly budgets are a type of time-based budget, focused on monthly periods, but do not specifically address the issue of fixed costs versus variable costs. Therefore, choice (C) flexible, is the best option for this question.

Fixed Costs Are Usually Included in ________ Budgets,but They Remain