Which of the following is true of flexible budgets?
A) They serve only the control needs of management of an organization.
B) They enable firms to compute expected costs for a range of activity levels.
C) They allow managers to develop financial results for only one potential scenario.
D) They do not require the managers to know the cost behavior pattern of each item in the budget.
E) All of these are correct.

Question

Quizplus · Accepted Answer

Flexible budgets allow firms to compute expected costs for a range of activity levels, providing managers with a more accurate representation of costs and revenues based on actual levels of production or sales. They also enable better decision making by allowing managers to compare actual results against expected results at different levels of activity. None of the other options are entirely true of flexible budgets.

Which of the Following Is True of Flexible Budgets