Question

A flexible budget:a) Is designed to be adjusted at frequent intervals for changes in the general price level. b) Consists of estimates of costs and expenses for various possible levels of activity.c) Cannot be prepared when a standard cost system is in use. d) Is better suited for use with a job cost system than a standard cost system.

Answer 1

A flexible budget is a budget that adjusts or flexes with changes in volume or activity.

Explanation: For costs that vary with volume or activity, the flexible budget will flex because the budget will include a variable rate per unit of activity instead of one fixed total amount.