Which of the Following Actions Would Reduce a Budget in a Flexible

question 5

Multiple Choice

Which of the following actions would reduce a budget in a flexible budgeting system when output is expected to decrease?

• A) Designate all costs as fixed
• B) Select the highest cost standard
• C) Select the expenditure base that will supply the highest starting point for the budget
• D) Select the highest inflation factors
• E) All of these are correct.

---

Definitions:

Feasible

Capable of being done or achieved; possible within a set of constraints or conditions.

Gallons of Gasoline

A measurement of gasoline volume, with one gallon equal to approximately 3.785 liters, commonly used in the United States for fuel transactions.

Budget Line

A visual diagram showing every pairing of two items that a person can purchase within their budget constraints, based on their earning and the cost of these products.

Consumption Bundles

These are combinations of different goods and services that an individual consumes, representing a mix of choices according to their preferences and budget.