The correct answer is: All three statements are true

A flexed budget allows businesses to evaluate a manager's performance more fairly is true because certain factors are often out of the manager's control. The level of sales (or production) will be out of the manager's control and a flexed budget will account for this.

A fixed budget is useful for defining the broad objectives of the organisation is true. The major purpose of a fixed budget is at the planning stage when it seeks to define the broad objectives of the organisation.

Relying on fixed budgets alone would usually give rise to massive variances is true because forecast volumes are very unlikely to be equal to actual volumes and so the variances will contain large volume differences.