In this type of control system, the master budget is based on a single prediction for sales volume, and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur:
A) Variable budget.
B) Flexible budget.
C) Fixed budget.
D) Sales budget.
E) Standard budget.

Question

Quizplus · Accepted Answer

A fixed budget is based on a single prediction for sales volume, and the budgeted amount for each cost assumes a specific amount of sales will occur. It does not adjust or flex based on actual sales volume or other changes in the business environment. Therefore, a fixed budget is appropriate when the business environment is stable and predictable.

In This Type of Control System, the Master Budget Is