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What type of budget is designed to change in accordance with the level of activity actually attained?
- a)Fixed budget
- b)Flexible budget
- c)Operational budget
- d)Master budget
Correct answer is option 'B'. Can you explain this answer?
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What type of budget is designed to change in accordance with the level...
A flexible budget is designed to change in accordance with the level of activity actually attained. It recognizes the difference in behavior between fixed and variable costs and adjusts accordingly.
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What type of budget is designed to change in accordance with the level...
Flexible Budget:
Flexible budget is a type of budget that is designed to change in accordance with the level of activity actually attained. It is a budget that adjusts the original budgeted amounts for revenues and expenses based on the actual level of activity achieved.
Key points about Flexible Budget:
1. Adjusts to Activity Levels: A flexible budget is able to adjust to the actual level of activity achieved by a business. This means that as the level of activity changes, the budgeted amounts for revenues and expenses will also change accordingly.
2. Provides Accurate Analysis: By adjusting the budgeted amounts to reflect the actual level of activity, a flexible budget provides a more accurate analysis of a business's performance. It allows for better comparison between budgeted and actual figures.
3. Helps in Decision Making: The flexibility of a flexible budget makes it a useful tool for decision-making. Business managers can use the budget to evaluate performance, identify variances, and make informed decisions based on the actual level of activity achieved.
In conclusion, a flexible budget is an important tool for businesses as it allows for adjustments to be made based on the actual level of activity attained. This flexibility provides a more accurate analysis of performance and helps in decision-making processes.
Flexible budget is a type of budget that is designed to change in accordance with the level of activity actually attained. It is a budget that adjusts the original budgeted amounts for revenues and expenses based on the actual level of activity achieved.
Key points about Flexible Budget:
1. Adjusts to Activity Levels: A flexible budget is able to adjust to the actual level of activity achieved by a business. This means that as the level of activity changes, the budgeted amounts for revenues and expenses will also change accordingly.
2. Provides Accurate Analysis: By adjusting the budgeted amounts to reflect the actual level of activity, a flexible budget provides a more accurate analysis of a business's performance. It allows for better comparison between budgeted and actual figures.
3. Helps in Decision Making: The flexibility of a flexible budget makes it a useful tool for decision-making. Business managers can use the budget to evaluate performance, identify variances, and make informed decisions based on the actual level of activity achieved.
In conclusion, a flexible budget is an important tool for businesses as it allows for adjustments to be made based on the actual level of activity attained. This flexibility provides a more accurate analysis of performance and helps in decision-making processes.
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What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer?
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What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer?.
What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What type of budget is designed to change in accordance with the level of activity actually attained?a)Fixed budgetb)Flexible budgetc)Operational budgetd)Master budgetCorrect answer is option 'B'. Can you explain this answer?.
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