A static budget is an effective means to evaluate a manager's ability to control costs regardless of the actual activity level.

Question

Quizplus · Accepted Answer

A static budget is based on a fixed activity level and does not account for changes in actual activity or volume. Therefore, it is not an effective means to evaluate a manager's ability to control costs in varying levels of activity or volume. A flexible budget that adjusts for changes in activity level would be more appropriate for such evaluation.

A Static Budget Is an Effective Means to Evaluate a Manager's