Which of the following best describes aflexible budget?Select one:a. A budget which can be fixed whenactual costs are known, to provide arealistic forecast for the forthcomingperiodb. A budget which is prepared on aspreadsheet, with the flexibility to add newcost items to prepare new forecasts ascircumstances change during the yearc. A budget which, by recognizingdifferent cost behavior pattern, is designedto change as volume of activity changesd. A budget which is designed to beeasily updated to reflect recent changes inunit costs or selling price

A budget that modifies or controls with adjustments in volume or activity is called a flexible…

Answered: Which of the following best describes a…

Business

Management

Which of the following best describes a flexible budget?

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Concept explainers

Forecasting

Forecasting is a methodology that uses historical data as inputs to make well-informed predictions about the course of future trends. Forecasting is the method of making forecasts based on historical and current data, most commonly by trend analysis. In the business world, forecasting is a basic statistical task. Forecasting is used by businesses to decide how to allocate their budgets or prepare for expected expenditures in the future. Forecasts help managers formulate and execute production plans by providing forecasts. The primary goal of forecasting is to make accurate predictions.

Question

Which of the following best describes a
flexible budget?
Select one:
a. A budget which can be fixed when
actual costs are known, to provide a
realistic forecast for the forthcoming
period
b. A budget which is prepared on a
spreadsheet, with the flexibility to add new
cost items to prepare new forecasts as
circumstances change during the year
c. A budget which, by recognizing
different cost behavior pattern, is designed
to change as volume of activity changes
d. A budget which is designed to be
easily updated to reflect recent changes in
unit costs or selling price

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