A disadvantage of static budgets is that they
A)are dependent on the previous year's actual results
B)cannot be used by service companies
C)do not allow for possible changes in activity levels
D)show the expected results of a responsibility center for several levels of activity

Question

Quizplus · Accepted Answer

Static budgets are fixed for a set level of activity and do not adjust for changes in activity levels, making them less flexible and potentially less accurate for planning and control purposes if actual activity levels differ significantly from the anticipated levels.

A Disadvantage of Static Budgets Is That They