Answer (B) is correct . A flexible budget is a series of several budgets prepared for many levels of sales and production. A flexible budget is designed to allow adjustment of the budget to the actual level of activity before comparing the budgeted activity with actual results.
Answer (A) is incorrect because A continuous budget is revised on a regular (continuous) basis by extending it for another month or quarter in accordance with new data as the current month or quarter ends.
Answer (C) is incorrect because A strategic plan is a long-term planning device.
Answer (D) is incorrect because A static (fixed) budget is prepared for only one level of output. That level will probably not be the level of actual operations.
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