Final answer:
The purpose of the flexible budget is to compare actual and budgeted results across different levels of production. It adapts to the company's productivity and helps in managing financial outcomes by considering variable and fixed costs.Thus the correct option is C.
Step-by-step explanation:
The purpose of the flexible budget is to C. compare actual and budgeted results at virtually any level of production. Unlike a static budget that remains unaltered regardless of the levels of output, a flexible budget adjusts to reflect the company's level of productivity. This approach allows management to gain a more accurate picture of performance by considering both fixed costs that do not change with production volume and variable costs that do. The flexible budget provides a framework for identifying how changes in production volume and cost behavior - such as shifts in variable costs or the impact of fixed costs - affect the financial outcomes. This is essential for managing finances more effectively, understanding the economic choices at hand, and establishing a budget that serves as a roadmap for financial planning.