When Should a Company Use an Activity-Based Flexible Budget with Multiple

Multiple Choice

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

A) when a significant portion of costs vary with only one cost driver
B) when a significant portion of costs vary with the number of units of output
C) when a significant portion of costs vary with the number of units of sales
D) when a significant portion of costs vary with several different cost drivers