Select the incorrect statement regarding flexible budgets. Multiple Choice Flexible budgets often show the estimated revenues and costs at multiple volume levels. A flexible budget is used to compare actual to budgeted amounts. A flexible budget is also known as a master budget. Standard prices and costs are used in preparing a flexible budget.

Question

Otis

Business

7 August, 11:55

Select the incorrect statement regarding flexible budgets. Multiple Choice Flexible budgets often show the estimated revenues and costs at multiple volume levels. A flexible budget is used to compare actual to budgeted amounts. A flexible budget is also known as a master budget. Standard prices and costs are used in preparing a flexible budget.

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Answers (2)

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Holly Hanson · Answer 1

Option C is the correct answer ...

A flexible budget is also known as a master budget is incorrect

Explanation:

A master budget is a term used for aggregation of all budgets prepared by all divisions.

Trevor Herring · Answer 2

A flexible budget is also known as a master budget

Explanation:

A flexible budget is that which is prepared to reflect the actual activity level achieved.

It is useful for a control purpose; to compare the actual result to the expected performance. The expected performance is the the flexible budget which is a revised master budget.

Also it uses the assumptions of the static budget like standard costs and prices.

The incorrect statement is that a flexible budget is also known as a master budget.