General Studies · Budgeting & Cost Accounting
What is the primary difference between a fixed budget and a flexible budget?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A fixed budget cannot be flexed to an actual level of activity, while a flexible budget can
- 2A fixed budget is prepared for a single level of activity, while a flexible budget is prepared for different activity levels✓
- 3A fixed budget reflects different activity levels, while a flexible budget is prepared for a single level of activity
- 4A fixed budget contains only fixed costs, while a flexible budget also contains variable costs
Correct answer
A fixed budget is prepared for a single level of activity, while a flexible budget is prepared for different activity levels
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