Question

The "flexible budget" can best be described as a budget that adjusts:

A. Revenues for sales-dollar changes.
B. Revenues and expenses for changes in output (such as sales volume).
C. Expenses for changes in budgeted output between two periods.
D. For efficiency, but not selling price and cost variances.
E. For selling price and cost variances, but not efficiency variances.

Answer 1

A flexible budget adjusts revenues and expenses for changes in output (such as sales volume).

Step-by-step explanation:

The "flexible budget" can best be described as a budget that adjusts revenues and expenses for changes in output (such as sales volume). It is a tool used by businesses to monitor and control their financial performance. A flexible budget provides a more accurate reflection of actual costs and revenues, as it takes into account changes in activity levels.