A static budget report is appropriate for
A) only fixed manufacturing costs.
B) only fixed selling and administrative expenses.
C) variable selling and administrative expenses.
D) both fixed manufacturing costs and fixed selling and administrative expenses.

Question

Quizplus · Accepted Answer

A static budget report is appropriate for both fixed manufacturing costs and fixed selling and administrative expenses. A static budget is a projection of the expected revenue and expenses at a single point in time and does not take into account any variability in the actual results. As fixed costs remain constant regardless of the level of production or sales, they can be accurately projected in a static budget. However, variable costs such as variable selling and administrative expenses cannot be accurately projected in a static budget as they may fluctuate with changes in production or sales levels.

A Static Budget Report Is Appropriate for