The purpose of a flexible budget is to:

Business

1 answer:

Ksenya-84 [330]2 years ago

8 0

Answer:

c. update the static planning budget to reflect the actual level of activity for the period

Explanation:

A flexible budget is a financial plan of expenses and revenues based on the actual level of output. A flexible budget adapts to changes in prices and company needs. Because the budget varies with the market condition, it is called a variable cost.

Due to their variable nature, flexible budgets are used to update the static estimates at the end of a period. The company compares the actual result in the flexible budget with that of a static budget. The management uses a flexible budget to evaluate the business performance for the period. Specific areas of success and failures are highlighted. Decisions on areas that need improvement can then be made.

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A. explain the auditor’s justification for accepting the uncertainties that are inherent in the sampling process.

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