Question

If the actual level of activity is different from the budgeted level, a _________ budget is prepared for the actual level of activity.

1) continuous
2) zero-based
3) master
4) flexible

Answer 1

A flexible budget is prepared for the actual level of activity when it is different from the budgeted level.

Step-by-step explanation:

If the actual level of activity is different from the budgeted level, a flexible budget is prepared for the actual level of activity. A flexible budget adjusts the budgeted amounts based on the actual level of activity, allowing for more accurate planning and control. This type of budget is commonly used in businesses to help monitor and manage costs.