When Should a Company Use an Activity-Based Flexible Budget with Multiple

question 7

Multiple Choice

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

• A) when a significant portion of costs vary with only one cost driver
• B) when a significant portion of costs vary with the number of units of output
• C) when a significant portion of costs vary with the number of units of sales
• D) when a significant portion of costs vary with cost drivers other than units of output

---

Definitions:

Soluble Fiber

A type of dietary fiber that dissolves in water to form a gel-like substance, aiding in digestion and helping to lower cholesterol levels.

Dietary Protein

Essential nutrients found in food sources like meat, dairy, legumes, and nuts that are crucial for the building, maintenance, and repair of body tissues.

Acceptable Macronutrient Distribution Ranges

Guidelines recommended by health experts that suggest the proportion of carbohydrates, proteins, and fats people should consume to maintain health and reduce the risk of chronic diseases.

Carbohydrate

A macronutrient consisting of sugars, starches, and fibers found in fruits, grains, vegetables, and milk products, providing energy to the body.