Which of the following is NOT a component of a flexible budget?

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Question: Which of the following is NOT a component of a flexible budget?

Options:

Correct Answer: Historical data

Solution:

A flexible budget adjusts for changes in sales volume and includes variable and fixed costs, but does not directly include historical data.

Which of the following is NOT a component of a flexible budget?

Which of the following is NOT a component of a flexible budget?

Step 1: Understand what a flexible budget is. A flexible budget is a budget that adjusts based on changes in sales volume.
Step 2: Identify the components of a flexible budget. It includes variable costs (costs that change with sales volume) and fixed costs (costs that remain the same regardless of sales volume).
Step 3: Recognize what is NOT included in a flexible budget. A flexible budget does not directly include historical data, which refers to past financial information.
Step 4: Conclude that the answer to the question is historical data, as it is not a component of a flexible budget.

No concepts available.