Budgets should ________.
A) not be so rigid that if conditions change, adjustments in spending can be made
B) be administered rigidly
C) only be developed for short periods of time such as quarters
D) include only variable costs

Question

Quizplus · Accepted Answer

Budgets should provide a guideline for spending but also allow for flexibility in case there are changes in conditions. Rigidly administering a budget can actually hinder a company's ability to adapt to changes and can lead to missed opportunities. Budgets should be developed for longer periods of time such as a full year, although they should be reviewed and adjusted if necessary on a regular basis. Finally, budgets should include both fixed and variable costs, not just variable costs.

Budgets Should ________