Final answer:
The production department typically has a flexible budget as its costs vary with the level of production output, unlike building maintenance, legal, or treasurer's departments with more fixed costs.
Step-by-step explanation:
When considering which departments have flexible budgets, it is important to understand the nature of their expenses. A flexible budget adjusts with changes in the volume of activity. The production department typically operates with a flexible budget because its costs are closely related to the level of production output. Expenses vary based on the number of units produced, which requires a budget that can adapt to such fluctuations.
Departments like building maintenance, legal, and the treasurer's department generally have more fixed costs that do not vary directly with production volume. For example, building maintenance costs might vary month-to-month or be influenced by seasonal factors, but they are not directly tied to production levels. Similarly, the legal department and treasurer's department have functions and costs that are largely independent of production volume, leaning more towards fixed budgets that allocate funds irrespective of output levels.