If managers could accurately predict actual volume when preparing the master budget there would be no need for flexible budgets.

Question

Quizplus · Accepted Answer

Flexible budgets are used to adjust for variations in actual volume compared to the master budget. If managers could predict actual volume accurately, the master budget would already reflect the correct figures, eliminating the need for adjustments through flexible budgets.

If Managers Could Accurately Predict Actual Volume When Preparing the Master