A disadvantage of static budgets is that they:
A) are dependent on previous year's actual results
B) cannot be used by service companies
C) do not show possible changes in underlying activity levels
D) show the expected results of a responsibility center for several levels of activity

Question

Quizplus · Accepted Answer

Static budgets are prepared based on a specific level of activity, and they do not show any possible changes in underlying activity levels. This makes static budgets less flexible and less useful for decision-making purposes.

A Disadvantage of Static Budgets Is That They