A flexible budget is appropriate for a marketing budget and a factory overhead budget. True False

A flexible budget is appropriate for a marketing budget and a factory overhead budget.

True

False

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Expert Solution

There are 2 types of budgets, fixed and flexible.

Fixed budget is a budget that is prepared at the beginning of the year and not changed until it's time to make a new one at the start of the next year.

A flexible budget, on the other hand, is a series of budgets prepared for various levels of activities, revenues and expenses

A marketing budget includes expenses incurred for promotion and sales. Some of these items, such as sales commissions or sample promotional products change with activity level. Hence a flexible budget is apporpriate for a marketing budget.

Factory overheads are of two kinds, fixed and variable. Fixed overheads include machinery and variable overheads include wages, maintainence, surpervision etc. Since some of the overheads are flexible, a flexible budget is needed to cope up with the changing market.

Hence, the corect answer is True.

jeff jeffy answered 2 years ago

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