Accounting · Budgetary Control
The following statements relate to fixed budgets and flexible budgets: (i) If actual production levels far exceed those anticipated, relying on a fixed budget is likely to result in misleading variances. (ii) Flexible budgets assist management control by providing comparable information based on actual activity levels. (iii) Flexible budgets are always superior to fixed budgets regardless of the business stability. Which of the statements are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(i), (ii) and (iii)
- 2(ii) and (iii) only
- 3(i) and (ii) only✓
- 4(i) only
Correct answer
(i) and (ii) only
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