Which statements regarding flexible budgeting are true? Multiple select question. It involves variable cost items such as direct materials, direct labor, and variable manufacturing overhead. It is done by multiplying the variable cost per unit of each variable cost item by the actual activity level. The budget allowance for variable costs should be flexed to show the costs that should have been incurred for the actual level of activity. Flexible budgeting should include an adjustment to the fixed overhead budget.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Which statements regarding flexible budgeting are true?
Multiple select question.
It involves variable cost items such as direct materials, direct labor, and variable manufacturing
It is done by multiplying the variable cost per unit of each variable cost item by the actual activity level.
The budget allowance for variable costs should be flexed to show the costs that should have been incurred for the actual level of activity.
Flexible budgeting should include an adjustment to the fixed overhead budget.
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