Question

Flexible budgeting is a reporting system wherein the: Group of answer choices a. Statements included in the budget report vary from period to period. b. Budget standards may be adjusted at will. c. Reporting dates vary according to the levels of activity reported upon. d. Planned level of activity is adjusted to the actual level of activity before the budget comparison report is prepared.

Answer 1

Answer: d. Planned level of activity is adjusted to the actual level of activity before the budget comparison report is prepared

Explanation: Flexible budgeting is a reporting system wherein planned level of activity is adjusted to the actual level of activity before the budget comparison report is prepared. It is therefore made after an intelligent classification of all expenses (fixed, semi-variables and variable) and adjusts or flexes with changes in volume or activity.. The reason why expenses are classified so is that the usefulness of a budget such as a flexible one is dependent upon the accuracy of classifying expenses.