When a flexible budget is used and actual output exceeds forecasted output, the percentage change in total expenses in the restated or flexed budget will be

Question

Quizplus · Accepted Answer

In a flexible budget, variable costs change with output, but fixed costs remain constant. Therefore, the percentage change in total expenses will be less than the percentage increase in output because only the variable portion of the costs will increase.

When a Flexible Budget Is Used and Actual Output Exceeds