Why are flexible budgets powerful control tools?
A)They allow managers to set the budget at a budgeted activity level.
B)They allow the calculation of what cost should be for the actual level of activity.
C)They allow the preparation of historical reports.
D)They allow the calculation of what cost should be for the budgeted level of activity.

Question

Quizplus · Accepted Answer

Flexible budgets are powerful control tools because they allow managers to calculate what costs should be for the actual level of activity, enabling them to make adjustments and take corrective action as necessary. This flexibility provides managers with greater insight into the causes of variances between actual and budgeted results, helping them to better manage costs and resources.

Why Are Flexible Budgets Powerful Control Tools