Select the incorrect statement regarding flexible budgets.
A) Standard prices and costs are used in preparing a flexible budget.
B) A flexible budget is also known as a master budget.
C) Flexible budgets show estimated revenues and costs at multiple volume levels.
D) A flexible budget represents an extension of the master budget.

Question

Quizplus · Accepted Answer

A flexible budget is not known as a master budget. A master budget is a comprehensive financial plan for the entire organization that includes budgets for all departments or functions. A flexible budget, on the other hand, is a budget that adjusts to changes in activity levels or volume, allowing for more accurate performance evaluation and cost management.

Select the Incorrect Statement Regarding Flexible Budgets