The purpose of a flexible budget is to:

Question

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The purpose of a flexible budget is to allow for variances in production levels by comparing actual results to budgeted results at different levels of production. This allows for more accurate analysis of performance and helps to identify areas where adjustments may need to be made. Option B is incorrect because a flexible budget does take variable costs into account. Option C is partially correct, as a flexible budget does allow for some flexibility in meeting goals, but this is not the primary purpose. Option D is incorrect because a flexible budget can actually increase the time spent preparing the budget due to the need to create multiple budget scenarios based on different production levels.

The Purpose of a Flexible Budget Is To