Final answer:
The use of a flexible budget allows for comparing actual results to a budget based on the actual activity for the period, adjusting for actual volume, making it an effective tool for controlling wasteful expenditures and following a financial plan.
Step-by-step explanation:
Comparing actual results to a budget based on the actual activity for the period is possible with the use of a flexible budget. A flexible budget is designed to adjust according to the actual level of output, revenue, or another activity base.
Unlike a static budget, which remains fixed regardless of changes in business activity levels, a flexible budget provides a more accurate comparison for performance evaluation by adjusting to the actual volume of activity. This makes it a valuable tool for analyzing variances, identifying wasteful expenditures, and adhering to a financial plan.