Question

flexible budget uses sales price and variable costs at the budgeted per unit amount applied to the varying volume levels; flexible budget uses fixed costs at the total budgeted amount

Answer 1

A flexible budget in business adjusts costs and revenues based on different volume levels. It uses sales price and variable costs at the budgeted per unit amount and fixed costs at the total budgeted amount.

Step-by-step explanation:

A flexible budget is a tool used in business to adjust costs and revenues based on different volume levels. It uses the sales price and variable costs at the budgeted per unit amount to calculate costs and revenues at varying volume levels. The flexible budget also includes fixed costs at the total budgeted amount, which do not change regardless of the level of production.

For example, let's say a company budgeted $10 per unit for variable costs and expects to sell 100 units. However, if the actual sales volume differs, the flexible budget adjusts the variable costs accordingly. If the company sells 120 units, the flexible budget will calculate the variable costs as $10 multiplied by 120 units. The fixed costs, on the other hand, remain the same regardless of the level of production.