A flexible budget:
A) Consists of advance estimates of costs and expenses for various possible levels of activity.
B) Is designed to be adjusted at frequent intervals for changes in the general price level.
C) Is better suited for use with a job cost system than a standard cost system.
D) Cannot be prepared when a standard cost system is in use.

Question

Quizplus · Accepted Answer

A flexible budget is a budget that adjusts for changes in levels of activity. It consists of advance estimates of costs and expenses for different levels of activity. This makes it more flexible and adaptable to changes in activity levels than a traditional static budget. With a flexible budget, a business can plan for different levels of activity and adjust their budget accordingly, making it an effective tool for managing costs and expenses.

A Flexible Budget