Question

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis. T/F

Answer 1

False

Step-by-step explanation:

A flexible budget is a financial plan that varies with the levels of output and input. It is a budget that adjusts to the needs of a company and the actual revenue levels. Flexible budgets contrast fixed budgets that remain the same regardless of actual income levels.

A flexible budget uses actual revenues for a period. It records the actual expenses incurred, whether fixed or variable. A flexible budget like other financial plans and will have fixed, and variable costs indicated separately. Separating fixed and variable cost helps the management in evaluating financial performance for that period.