A static budget offers management the best results when
A)variable material costs are fixed by suppliers to the company.
B)fixed selling costs are established at the start of the budget process.
C)fixed manufacturing costs are established at the start of the budget process.
D)fixed manufacturing, selling, and administrative costs are established at the start of the budget process.

Question

Quizplus · Accepted Answer

A static budget is best when fixed manufacturing, selling, and administrative costs are established at the start of the budget process. This allows management to accurately project their expenses and revenues, and make informed decisions throughout the budget period. If variable material costs are not fixed, a static budget may not accurately reflect actual expenses.

A Static Budget Offers Management the Best Results When