Variable budgeting requires adjustment of monthly expenditures so that they do not exceed revenues; rarely used by school-based programs.

• A. Spending-ceiling model
• B. Fixed budgeting
• C. Variable budgeting
• D. Line-Item budgeting

Answer: (C)

Flexible budgeting adjusts expenditures to match actual revenues or activity levels. This approach requires revising monthly spending so the total does not exceed what has been earned, and it can scale up or down as income changes. That direct alignment with the available funds is why it’s the best fit for the statement: expenses are kept in step with what the program actually brings in, preventing overspending.

In contrast, a spending-ceiling model sets a maximum allowable spending but doesn’t inherently adapt to changes in revenue. Fixed budgeting uses a static amount regardless of how much money is available, which could lead to overspending if revenues fall. Line-item budgeting focuses on detailed categories of spending rather than adjusting the overall total to match funds; it emphasizes control of line items rather than dynamic revenue-driven flexibility. In school-based programs, funding is often more fixed and category-restricted, which is why variable budgeting is less common there, even though it suits scenarios with fluctuating funds.