Which One of the Following Statements Is True in Developing

question 25

Multiple Choice

Which one of the following statements is true in developing a flexible budget within a relevant range of activity?

• A)The budget must reflect a fixed level of activity.
• B)Total variable costs should be adjusted based on the activity index chosen.
• C)Costs cannot increase when different levels of activity exist.
• D)Fixed costs are not reported.

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Definitions:

Income Taxes Payable

The amount of income taxes a company owes to the government but has not yet paid.

Operating Activities

Activities that are directly related to the primary operations of a company, such as selling products or services, which are reflected in the company's cash flow.

Net Cash

The amount of cash remaining after all operating, investing, and financing activities have been accounted for over a certain period.

Operating Activities

Business activities related to the day-to-day functions of a company, including production, sales, and administrative tasks.