Which of the following reason(s)cause flexible budgets to be useful planning tools?
A) Flexible budgets allow managers to anticipate results under a variety of scenarios.
B) Flexible budgets can help determine if a company's cash position is adequate.
C) Flexible budgets can help managers judge if materials and storage facilities are appropriate for various production levels.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

All of these reasons are valid and contribute to the usefulness of flexible budgets as planning tools. Flexible budgets provide managers with the ability to anticipate results under different scenarios, which can offer insight into potential outcomes and inform decision-making. They can also help managers determine whether the company's resources, such as materials and storage facilities, are appropriate for different production levels. Additionally, flexible budgets can aid in assessing the company's cash position and ensuring that it is sufficient for its needs.

Which of the Following Reason(s)cause Flexible Budgets to Be Useful