Asked by Farid Habibi on May 12, 2024

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Flexible budgets may be prepared before or after an actual period of activity.Why would management prepare such budgets at differing time frames?

Flexible Budgets

Budgets that adjust or flex according to changes in activity levels or other factors that influence operating expenses.

  • Recognize the application and preparation of flexible budgets in different scenarios.
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Thaddeus B FreemanMay 15, 2024
Final Answer :
Flexible budgets are prepared prior to activities to allow management to see possible predicted outcomes.The different levels often include both a best-case and worst-case scenario.They are prepared after a period to better compare expected results at the actual level of sales or other activity with the actual results to determine relevant and meaningful variances.