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In a flexible budget, costs are adjusted based on which of the following?
In a flexible budget, costs are adjusted based on which of the following?
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Practice Questions
1 question
Q1
In a flexible budget, costs are adjusted based on which of the following?
Actual sales volume
Projected sales volume
Historical sales volume
Standard costs
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A flexible budget adjusts costs based on actual sales volume, allowing for better performance evaluation.
Questions & Step-by-step Solutions
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Q
Q: In a flexible budget, costs are adjusted based on which of the following?
Solution:
A flexible budget adjusts costs based on actual sales volume, allowing for better performance evaluation.
Steps: 4
Show Steps
Step 1: Understand what a flexible budget is. It is a budget that changes based on actual sales or production levels.
Step 2: Know that costs in a flexible budget are not fixed. They can vary depending on how much is sold or produced.
Step 3: Realize that the main factor for adjusting costs in a flexible budget is the actual sales volume.
Step 4: Learn that by adjusting costs based on actual sales, businesses can evaluate their performance more accurately.
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