A Before-The-Fact Flexible Budget

question 56

Multiple Choice

A before-the-fact flexible budget

• A)calculates expected costs for various levels of activity.
• B)allows managers to deal with uncertainty.
• C)can be used to generate results for a number of plausible scenarios.
• D)is a useful planning tool.
• E)all of these.

---

Definitions:

Work In Process

Inventory that includes items currently being manufactured but not yet completed.

Units

The individual items or product quantities produced or sold by a business.

FIFO Method

An inventory valuation method that assumes items purchased or produced first are sold first, and the newer inventory remains unsold.

Equivalent Units

Equivalent units are used in cost accounting to express the amount of work done on incomplete products in terms of fully completed units of output.