Choice "C" is correct. A master budget is an overall budget, consisting of many smaller budgets, that is based on one specific level of production. A flexible budget is a series of budgets based on different activity levels within the relevant range.
Choice "d" is incorrect. The usefulness of master budgets and flexible budgets is not limited to specific periods.
Choice "b" is incorrect. The master budget includes the entire company, not just the production facility. The flexible budget can cover many levels of activity, not just one department.
Choice "a" is incorrect. Flexible budgets do not allow management latitude in meeting goals, but they do give management the opportunity to compare actual results to the budget for the activity level achieved.