Which of the Following Statements Is True Concerning the Flexible

question 54

Multiple Choice

Which of the following statements is true concerning the flexible budget?

• A)The flexible budget shows the expected relation between costs and volume.
• B)The flexible budget has a fixed cost component which is expected to be incurred regardless of the level of activity.
• C)The flexible budget has a variable cost per unit of activity component where variable costs change in total as the level of activity changes.
• D)all of the above.

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Definitions:

Operating Cycle

The average period of time between the purchase of goods or services and the receipt of cash from sales, typical in the context of a company's day-to-day operations.

APB Opinion No.22

A guideline issued by the Accounting Principles Board that requires companies to disclose their accounting policies in their financial statements.

Significant Accounting Policies

The specific principles, bases, conventions, rules, and practices applied by a firm in preparing and presenting financial statements.

Comprehensive Income

The change in equity of a company during a period from transactions and other events excluding any changes resulting from investments by and distributions to owners.