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Which of the following is true when a company determines that its costs should be explained by more than one cost driver? A.) The flexible budget performance report should be prepared using only a single cost driver.B.) A flexible budget performance report that is based on more than one cost driver will be more accurate than a flexible budget performance report that is based on just one cost driver.C.) A flexible budget performance report that is based on just one cost driver will be more accurate than a flexible budget performance report that is based on more than one cost driver.D.) A flexible budget performance report cannot be prepared.

Respuesta :

The flexible budget performance report should be prepared using only a single cost driver (Option A).

What is meant by flexible budget performance?

A management report called a flexible budget performance report contrasts the period's actual revenues and costs with those projected based on the actual sales volume.

What distinguishes a flexible budget from a performance report?

With a flexible budget estimate, non-fixed costs are modified according to variables like sales volume or the quantity of products you produce. The flexible budget takes that into account if your increased product output has increased raw material expenses. The deviations that this algorithm cannot account for are highlighted in the performance report.

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