A static budget report
A) shows costs at only 2 or 3 different levels of activity.
B) is appropriate in evaluating a manager's effectiveness in controlling variable costs.
C) should be used when the actual level of activity is materially different from the master budget activity level.
D) may be appropriate in evaluating a manager's effectiveness in controlling costs when the behavior of the costs in response to changes in activity is fixed.

Question

Quizplus · Accepted Answer

A static budget is designed for a single level of activity and does not change with the actual level of activity. Therefore, it is most appropriate for evaluating a manager's effectiveness in controlling costs that do not change with the level of activity, i.e., fixed costs.

A Static Budget Report