Question

Select the correct statement regarding flexible budgets.

A. A flexible budget can only be prepared for a single level of activity.
B. A flexible budget is not used for planning.
C. A flexible budget shows expected revenues and costs at a variety of activity levels.
D. A flexible budget is also known as the master budget.

Answer 1

C. A flexible budget shows expected revenues and costs at a variety of activity levels.

Step-by-step explanation:

A fkexible budget is a plan that you adjust according to changes in activity, for example, when costs vary with the changes in volume. This type of budget is adapted in regards to the organization's needs and it can be used for the whole company or a specific department. Also, the flexible budget is used to adjust the master budget to the current volume. According to this, the answer is that a flexible budget shows expected revenues and costs at a variety of activity levels.