Question

If the master budget prepared at a volume level of 10,000 units includes direct materials of $40,000, a flexible budget based on a volume of 12,000 units would include direct materials of $48,000.

a. True
b. False

Answer 1

The answer would be true if you really think about it because if 10,000 units is $40,000 then 12,000 units would estimate up to about $48,000