Asked by Haneen Hmedat on May 08, 2024
Verified
Using a flexible budget, actual results can be compared to what costs should have been at the actual level of activity.
Flexible Budget
A budget that adjusts or flexes with changes in volume or activity levels.
Actual Level
The real, observed level of activity, production, or performance in a given period.
Actual Results
The real, measured outcomes of business activities, often compared against budgeted or forecasted figures.
- Distinguish between static planning budgets and their flexible counterparts.
- Grasp the significance of activity levels in the management of costs and the preparation of flexible budgets.
Verified Answer
SG
Shalonda GordonMay 11, 2024
Final Answer :
True
Explanation :
This is correct. A flexible budget allows for varying levels of activity and provides a more accurate comparison to actual costs than a static budget that is not adjusted for changes in activity levels.
Learning Objectives
- Distinguish between static planning budgets and their flexible counterparts.
- Grasp the significance of activity levels in the management of costs and the preparation of flexible budgets.