In an activity flexible budget, the fixed cost component typically corresponds to
A) resources that vary with direct labor hours.
B) resources that vary as the activity output changes.
C) resources acquired in advance of usage.
D) resources acquired as needed.
E) None of these.

Question

Quizplus · Accepted Answer

Fixed costs in a flexible budget are typically associated with resources acquired in advance of usage, as these costs do not vary with the level of output or activity in the short term.

In an Activity Flexible Budget, the Fixed Cost Component Typically