What is characteristic of an after-the-fact flexible budget?
A) It is a useful planning tool.
B) It is a budget for the actual level of activity.
C) It allows managers to deal with uncertainty.
D) It can be used to generate results for a number of plausible scenarios.

Question

Quizplus · Accepted Answer

An after-the-fact flexible budget is based on the actual level of activity that occurred, making choice B the correct answer. This type of budget is not a planning tool since it is created after the fact. While it can certainly help managers deal with uncertain situations, it is not designed specifically for this purpose. A flexible budget is created for a range of possible activity levels, not multiple plausible scenarios, so choice D is incorrect.

What Is Characteristic of an After-The-Fact Flexible Budget