Activity Flexible Budgeting Provides a More Accurate Prediction of Costs

Multiple Choice

Activity flexible budgeting provides a more accurate prediction of costs than a traditional flexible budgeting approach because

A) costs often vary with more than one driver.
B) nonunit level drivers are often not highly correlated with direct labor hours.
C) direct labor hours are often not measured correctly.
D) costs often vary with more than one driver and nonunit level drivers are often not highly correlated with direct labor hours.
E) costs often vary with more than one driver and direct labor hours are not correct.