The Purpose of a Flexible Budget Is To

question 294

Multiple Choice

The purpose of a flexible budget is to:

• A)remove items from performance reports that are not controllable by managers.
• B)permit managers to reduce the number of unfavorable variances that are reported.
• C)update the static planning budget to reflect the actual level of activity of the period.
• D)reduce the amount of conflict between departments when the master budget is prepareD.When a flexible budget is used in performance evaluation, actual costs are compared to what the costs should have been for the actual level of activity during the period rather than to the static planning budget.