Which of the following is a difference between a static and a flexible budget?
A) Static budgets use the same fixed cost amounts, whereas flexible budgets change the amount of fixed costs at different levels of activity.
B) Static budgets are based on the same per-unit variable amount, whereas flexible budgets are based on multiple per-unit variable amounts.
C) Static budgets are based on a single estimate of volume, whereas flexible budgets show estimated costs and revenues at a variety of activity levels.
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

The main difference between a static and a flexible budget is that a static budget is based on a single estimate of volume, while a flexible budget shows estimated costs and revenues at a variety of activity levels. Option A is incorrect because both static and flexible budgets can have fixed costs, but flexible budgets allow for changes in fixed costs at different activity levels. Option B is incorrect because both static and flexible budgets are based on per-unit variable amounts, but flexible budgets allow for different per-unit variable amounts at different activity levels. Option D is incorrect because there is a difference between static and flexible budgets.

Which of the Following Is a Difference Between a Static