Megan Pedigo is confused about how a flexible budget is prepared. Identify the steps for Megan.

Question

Question

Answer 1

Answer #1

Following are the steps for Megan:-

1. Analyze the range of activities for which we want to make budget.

2. Identify the behavior of cost for each activity. Cost behavior could be in the form of fixed, variable and semi variable cost.

3. Ascertain the activity level for which we need to make flexible budget.

4. Prepare the budget for each level of activity with corresponding costs.

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Answer 2

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