Asked by Ashley Stokes on Jul 15, 2024
Verified
In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.
Flexible Budgets
A financial plan that adjusts to varying levels of operational activity or volume.
Fixed And Variable
Terms describing costs within a business; fixed costs do not change with the volume of production, while variable costs do.
- Outline the various stages in the process of budgeting.
- Acknowledge the necessity of flexibility and adjustability in financial forecasting.
Verified Answer
JC
jacob CaricofeJul 16, 2024
Final Answer :
False
Explanation :
This statement is correct. In order to prepare a flexible budget, it is important to differentiate between fixed and variable costs and expenses as they will react differently to changes in activity levels.
Learning Objectives
- Outline the various stages in the process of budgeting.
- Acknowledge the necessity of flexibility and adjustability in financial forecasting.
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