A static budget is
A)considered a good choice for benchmarks in preparing a performance report.
B)computes expected costs for a range of activity levels.
C)compares actual costs with budgeted costs.
D)prepared for a particular level of activity.
E)none of these are correct.

Question

Quizplus · Accepted Answer

A static budget is prepared for a particular level of activity (usually based on prior year or expected activity levels). It is not ideal for comparisons with actual costs because it does not account for changes in activity levels. However, it can be useful as a benchmark for evaluating performance if the actual activity level matches the level used in the budget.

A Static Budget Is