Distinction between fixed variable and semi variable costs is required for preparing a ........

Costing ( Revenue Account ) Basics of Cost Control and Analysis

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Distinction between fixed, variable and semi-variable costs is required for preparing a:

master budget

flexible budget

fixed budget

short-term budget

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Explanation:

Here’s the thing—when you’re dealing with different types of costs (fixed, variable, semi-variable), you need that info for budgets that can actually *change* as activity levels change.

- The master budget is a whole-company plan. It needs cost estimates, but not detailed cost behavior for each line item.

- A flexible budget is built to adjust as your output or sales change. It *needs* to know which costs are fixed, which are variable, and which are semi-variable, or you can’t flex it properly.

- A fixed budget? That’s set for one level of activity—cost behavior doesn’t really matter, because the numbers don’t change if your output goes up or down.

- A short-term budget is just about the time frame, not the cost behavior.

So, the correct answer is:

Option:2, flexible budget