ECONOMICS

Detailed explanation-1: -No, fixed costs should be included in a flexible budget even if they are not controllable costs. A flexible budget has complete information related to fixed costs.

Detailed explanation-2: -Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets.

Detailed explanation-3: -Fixed costs per unit will decrease. As we know, the total fixed costs remain the same within a relevant activity range. So if the activity level increases and the fixed expenses remain the same, the per-unit cost will decrease.

Detailed explanation-4: -Fixed costs will be the same in the static/planning budget and the flexible budget because fixed costs are unaffected in total by changes in the activity level. Therefore activity variances for fixed costs are always zero.

Detailed explanation-5: -The flexible budget will show different possibilities for variable expenses and revenue. Variable costs can include marketing and sales, and may also include the cost of materials, number of sales, and shipping costs. A flexible budget will include lines for different amounts.