Multiple choice

Directions: Choose the correct option for the given question.

A ______ is useful only when the actual level of activity corresponds to the budgeted level of activity.

  1. flexible budget

  2. master budget

  3. sales budget

  4. production budget

  5. fixed budget
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

A fixed budget is prepared for a single level of activity. It is only useful if the actual activity matches the budgeted level, as it does not adjust for changes in volume.

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