ECONOMICS

Detailed explanation-1: -A variable or flexible budget is so named because it only focuses on variable costs. A flexible budget expresses all costs on a per unit basis. Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

Detailed explanation-2: -These are the costs that vary as the total cost to the organization when the output (number of items or services produced by the unit/business) varies. In other words, we say that a variable cost varies in exactly the same proportion as the output varies.

Detailed explanation-3: -Definition: A flexible budget, also called a variable budget, is financial plan of estimated revenues and expenses based on the current actual amount of output.

Detailed explanation-4: -Answer and Explanation: The correct answer is *a) Consists of estimates of costs and expenses for various possible levels of activity. Flexible budgets are accounting tools that calculate different expenditure levels for variable costs, depending upon changes in actual revenue.

Detailed explanation-5: -Variable costs are sometimes called unit-level costs as they vary with the number of units produced.