154k views
3 votes
An understanding of cost behavior is useful to managers for: A. Absorption costing B. Flexible budgeting C. External reporting D. Inventory costing and income determination

1 Answer

2 votes

Answer:

The correct answer is letter "B": Flexible budgeting.

Step-by-step explanation:

Cost behavior helps managers to implement different budgeting strategies to maximize revenues. During the operations of a company, costs may vary. However, a company must drive all its efforts to keep its initial strategic plan unchanged keeping its profits goals.

For such a purpose, top executives must know how to handle flexible budgets to shorten certain operations or increase productivity in front of raising costs scenarios or managing a level of surplus (if the costs drop) that does not affect the entity but could offset future shortages.

User Herb Sutter
by
8.7k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.