What is the basic difference between a master budget and a flexible budget?
a. A flexible budget considers only variable costs; a master budget considers all costs.
b. A master budget is based on a predicted level of activity; a flexible budget is based on the actual level of activity.
c. A master budget is for an entire production facility; a flexible budget is applicable only to individual departments.
d. A flexible budget allows management latitude in meeting goals; a master budget is based on a fixed standard. (CPA adapted)