Question

Select the incorrect statement regarding flexible budgets. Multiple Choice Flexible budgets often show the estimated revenues and costs at multiple volume levels. A flexible budget is used to compare actual to budgeted amounts. A flexible budget is also known as a master budget. Standard prices and costs are used in preparing a flexible budget.

Answer 1

Answer:

Option C is the correct answer..

A flexible budget is also known as a master budget is incorrect

Explanation:

A master budget is a term used for aggregation of all budgets prepared by all divisions.

Answer 2

Answer:

A flexible budget is also known as a master budget

Explanation:

A flexible budget is that which is prepared to reflect the actual activity level achieved.

It is useful for a control purpose; to compare the actual result to the expected performance. The expected performance is the the flexible budget which is  a revised master budget.

Also it uses the assumptions of the static budget like standard costs and prices.

The incorrect statement is that a flexible budget is also known as  a master budget.