Asked by
Shamie Palaroan
on Oct 10, 2024
Verified
Flexible budgets can be used when there is more than one cost driver (i.e., measure of activity).
Flexible Budgets
Budgets that adjust or flex with variations in activity levels or other relevant factors, allowing more accurate comparisons to actual results.
Cost Driver
A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs.
- Identify the distinctions between static planning budgets and flexible budgets.
- Recognize the significance of activity levels in the administration of costs and the development of flexible financial plans.
Verified Answer
LT
Learning Objectives
- Identify the distinctions between static planning budgets and flexible budgets.
- Recognize the significance of activity levels in the administration of costs and the development of flexible financial plans.
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