Question

_________ budget gives different budgeted costs for different levels of activity.

• A. Master
• B. Fixed
• C. Flexible
• D. All of the above

Answer 1

The correct option is C Flexible

Based on the capacity , budget can be classified as fixed budget and flexible budget. Fixed budget are static budget which remains constant , irrespective of the level of activity i.e budget is prepared on a standard volume of output. On the other side, flexible budget is prepared for different level of production. Flexible budget changes with the level of activity. It is prepared on various level of out put. It is more sophisticated than the static budget.