In the Context of Budgeting, a Flexible Budget

question 69

Multiple Choice

In the context of budgeting, a flexible budget:

• A) is based on a single assumed level of sales.
• B) is designed to show the appropriate budgeted level of costs for each different level of sales.
• C) is the budget that is prepared before a static budget.
• D) cannot be used by companies for evaluation and comparisons involving real-world sales situations.

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Definitions:

Relative Frequency Distribution

A representation of the number of times each value occurs relative to the total number of observations.

Cumulative Frequency

The sum of frequencies accumulated up to a certain point in a distribution, showing the number or proportion of observations below a particular value.

Cumulative Relative Frequency

The accumulation of the previous relative frequencies up to a certain class or point, representing the proportion of observations.

Percentage

A proportion or share represented as a fraction of 100, used to express how large or small one quantity is relative to another quantity.