A series of budgets for varying rates of activity is termed a(n):
A) flexible budget
B) variable budget
C) master budget
D) activity budget

Question

Quizplus · Accepted Answer

A flexible budget is designed to adjust to variations in activity levels. It provides estimates of what revenues, expenses, and profits should be for any level of activity within a certain range. This type of budget is helpful in planning and decision-making as it provides a more accurate picture of financial performance under different levels of activity. Variable budgets and activity budgets are not commonly used terms, while a master budget typically includes a fixed budget for a specific period, not accounting for variations in activity levels.

A Series of Budgets for Varying Rates of Activity Is