Nonmanufacturing activities are usually controlled using a static budget rather than a standard costing system.

Question

Quizplus · Accepted Answer

Nonmanufacturing activities, such as marketing and administrative functions, typically do not involve the same level of cost analysis and control as manufacturing activities. Therefore, a simpler tool like a static budget is often used to set and manage budgets for nonmanufacturing activities. Standard costing systems are more commonly used in manufacturing environments where the cost of producing each unit of product must be closely tracked and managed.

Nonmanufacturing Activities Are Usually Controlled Using a Static Budget Rather