2. What is the primary difference between a fixed budget and a flexible budget? (10 points)

a.

A fixed budget includes only fixed costs, while a flexible budget includes only variable costs.

b.

A fixed budget is concerned only with future acquisitions of fixed assets, while a flexible budget is concerned with expenses, which vary with sales.

c.

A fixed is created by senior leadership while a flexible budget is created by employees.

d.

A fixed budget is a plan for a single level of sales (or other measure of activity), while a flexible budget consists of several plans, one for each of several levels of sales (or other measure of activity).