Question

31. The classification of fixed and variable cost is useful for the preparation of
(A) Master budget
(B) Flexible budget
(C) Cost budget
(D) Capital budget​

Answer 1

Answer:

Answer. Explanation: Fixed cost vs variable cost is the difference in categorizing business costs as either static or fluctuating when there is a change in the activity and sales volume.

Explanation:

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Answer 2

The classification of variable and fixed cost is quite useful for the preparation of a flexible budget.

• Option “B” is correct i.e. flexible budget.

• A flexible budget is a budget that regulates the movement or volume points of a company.  

• As compared to a static budget, which does not alter from the amounts recognized when the budget was created, a flexible budget continuously "flexes" with a business's differences in costs.

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