Question

Homer wanted a budget that can be adjusted easily to show budgeted revenues, costs, and cash flows at different levels of activity. Earl said he would be happy to prepare a:

A. A flexible budget.
B. A master budget.
C. A production budget.
D. A multi-level budget.

Answer 1

Earl would be happy to prepare a flexible budget for Homer. A flexible budget is a budget that can be easily adjusted to show budgeted revenues, costs, and cash flows at different levels of activity.

Correct option is A.

Step-by-step explanation:

Earl would be happy to prepare a flexible budget for Homer. A flexible budget is a budget that can be easily adjusted to show budgeted revenues, costs, and cash flows at different levels of activity. It allows for changes in activity levels and provides a more accurate representation of expected outcomes.