The correct answer is: C. Flexible budget.
A flexible budget is a budget that is adjusted for changes in the level of activity. This means that the budget will show different budgeted costs for different levels of activity.
A master budget is a comprehensive budget that covers all aspects of a company’s operations for a specific period of time. It is usually prepared for a one-year period, but it can also be prepared for shorter or longer periods. The master budget is based on the company’s sales forecast, and it includes budgets for sales, production, cost of goods sold, selling and administrative expenses, and cash flow.
A fixed budget is a budget that is not adjusted for changes in the level of activity. This means that the budget will show the same budgeted costs regardless of the level of activity. Fixed budgets are often used for short-term planning, such as for the next quarter or month.
In conclusion, a flexible budget is a budget that is adjusted for changes in the level of activity. This means that the budget will show different budgeted costs for different levels of activity. A master budget is a comprehensive budget that covers all aspects of a company’s operations for a specific period of time. A fixed budget is a budget that is not adjusted for changes in the level of activity.