Question

****14) The *flexible budget* enables to highlight the differences ________.

A) between actual costs and actual quantities versus budgeted costs and budgeted quantities for the actual output level
B) between budgeted costs and budgeted quantities versus actual costs and budgeted quantities for the budgeted output level
C) between budgeted costs and actual quantities versus budgeted costs and budgeted quantities for the actual output level
D) between actual costs and actual quantities versus budgeted costs and budgeted quantities for the budgeted output level

Answer 1

The flexible budget compares actual costs and actual quantities against budgeted costs and budgeted quantities for the actual output level, helping managers to analyze cost control and resource management. So, the correct answer is option a.

Step-by-step explanation:

A flexible budget is a tool that allows companies to compare their actual performance against their budgeted figures at various levels of activity. The correct answer to the student's question is A) between actual costs and actual quantities versus budgeted costs and budgeted quantities for the actual output level.

This highlights the differences by adjusting the budgeted costs and quantities to reflect the actual level of output, instead of being fixed at one level of output as in a static budget. With flexible budgets, managers can understand how well the company controls its costs and manages its resources.