Question

"flexible budget flexible budget:

a. cannot be used for evaluating real-world sales situations.
b. âis based on a single assumed level of sales.
c. âdifferentiates the budgeted costs for each sales level.
d. âis the budget that is prepared before a static budget."

Answer 1

The answer is: C) differentiates the budgeted costs for each sales level.

Step-by-step explanation:

A flexible budget is a budget that is adjusted according to different sales levels. It is adjusted to include different costs that vary according to different level of activities. The budget will flex (or adjust) because it includes a variable rate per unit of activity, and not just one fixed total amount.

For example, when you calculate the total costs of producing a chair, you can elaborate a flexible budget considering variable costs in materials, direct labor and machine hours for every chair produced.