An activity-based flexible budget differs from a conventional flexible budget in that:

Question

Quizplus · Accepted Answer

An activity-based flexible budget is more accurate because it uses multiple cost drivers to classify costs as fixed or variable, whereas conventional flexible budgets only use a single cost driver and may not accurately capture the variability of costs. Therefore, B is the best choice. A, C, D, and E are incorrect because they do not accurately describe the differences between activity-based and conventional flexible budgets.

An Activity-Based Flexible Budget Differs from a Conventional Flexible Budget