Answer (A) is correct . A flexible budget is a set of static budgets prepared in anticipation of varying levels of activity. Unlike a static budget, the use of a flexible budget permits effective evaluation of actual results when actual and expected production differ. Setting cost standards facilitates preparation of a flexible budget. For example, a standard unit variable cost is useful in determining the total variable cost for a given output.
Answer (B) is incorrect because Standard costing and flexible budgeting are the most appropriate techniques.
Answer (C) is incorrect because Standard costing and flexible budgeting are the most appropriate techniques.
Answer (D) is incorrect because Standard costing and flexible budgeting are the most appropriate techniques.
|
