Question

The flexible budget enables to highlight the differences ________. A) between actual costs and actual quantities versus budgeted costs and budgeted quantities for the actual output level B) between budgeted costs and budgeted quantities versus actual costs and budgeted quantities for the budgeted output level C) between budgeted costs and actual quantities versus budgeted costs and budgeted quantities for the actual output level D) between actual costs and actual quantities versus budgeted costs and budgeted quantities for the budgeted output level

Answer 1

Answer:

b) between budgeted costs and budgeted quantities versus actual costs and budgeted quantities for the budgeted output level

Explanation:

A budget is a statement of forecast stating projected expenses and revenues over a period of time.

A flexible budget is prepared comprising figures that are based upon actual output.

The figures are compared with static figures which are based upon budgeted output and the difference between the two is identified as a variance. Such a comparison reveals the difference between budgeted costs and actual actual.

A flexible budget allows for changes and flexibility in forecasting i.e there is room for deviations and variances and such a budget is not rigid.