The Main Disadvantage of a Flexible Spending Plan Is That

question 210

True/False

The main disadvantage of a flexible spending plan is that you may lose any money remaining in the account at the end of the fiscal year.

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Definitions:

Activity Rates

Charges or costs associated with specific business activities, used in costing and budgeting.

Activity Levels

Various stages of business operations ranging from high to low, impacting costs and revenues.

Activity-Based Costing (ABC)

A costing method that assigns overhead and indirect costs to related products and services based on the activities that drive those costs.

Overhead Rates

The method used to allocate indirect costs to produced goods, often calculated as a ratio of overhead to direct labor hours, direct labor costs, or machine hours.