When is a static budget most appropriate in evaluating a manager's performance?
A)when the actual costs incurred equal the amounts in the budget
B)when the actual activity is less than the master budget activity
C)when the company performed at the same activity level as the static budget level
D)The static budget is not appropriate for evaluating managers.

Question

Quizplus · Accepted Answer

A static budget is most appropriate in evaluating a manager's performance when the company performed at the same activity level as the static budget level. In this situation, the static budget serves as a good benchmark for evaluating the manager's ability to control costs and operate within the predetermined budget. If the actual activity level deviates significantly from the static budget level, a flexible budget would be a more appropriate tool for evaluating a manager's performance.

When Is a Static Budget Most Appropriate in Evaluating a Manager's