A flexible is a budget where:
A) the budget estimates are prepared for a range of activities.
B) fixed costs are not included.
C) the estimates are amended if they are not attained in the period.
D) preparation may be postponed if the entity is very busy or is short staffed.

Question

Quizplus · Accepted Answer

A flexible budget is a budget that is prepared for a range of activities or levels of output, allowing for changes in volume or activity. This means that the budget can be adjusted to reflect changes in activity levels, such as increases or decreases in production or sales. Fixed costs are still included in a flexible budget, but they are separated out so that managers can see the impact of changes in activity levels on variable and fixed costs. The estimates in a flexible budget are also updated or amended if they are not attained in the period to reflect actual results. The preparation of a flexible budget is not typically postponed due to a busy or short-staffed period, as it is an important tool for monitoring performance and making informed business decisions.

A Flexible Is a Budget Where