Asked by Brian Williams on May 27, 2024
Verified
Flexible budgets can be used by service organisations to
A) plan overhead costs.
B) control overhead costs.
C) determine product costing.
D) plan and control overhead costs.
Flexible Budgets
Budgets that adjust or flex based on changes in the level of activity or volume.
Service Organisations
Service Organisations are businesses that provide intangible products or services to consumers, relying heavily on human capital and expertise.
Overhead Costs
Refers to the ongoing business expenses not directly attributed to creating a product or service.
- Identify the fixed and variable elements of expenses through the utilization of a flexible budget.
Verified Answer
SS
Schuyler SchweersMay 30, 2024
Final Answer :
D
Explanation :
Flexible budgets can help service organizations plan and control overhead costs by allowing for adjustments based on changes in activity levels. This helps to ensure that the organization is allocating resources effectively and efficiently. Flexible budgets do not determine product costing, as service organizations do not typically have products in the traditional sense.
Learning Objectives
- Identify the fixed and variable elements of expenses through the utilization of a flexible budget.