Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance?
A) static planning budget and flexible budget
B) static planning budget and actual results
C) flexible budget and actual results
D) master budget and static planning budget

Question

Quizplus · Accepted Answer

A flexible budget compares actual results to what should have been spent or earned based on various levels of activity. This comparison allows the impact of changes in prices of inputs and outputs to be isolated. A static planning budget only provides a set plan based on one level of activity, while actual results include all changes that occurred during the period. A master budget includes all of the company's financial plans and goals, while a flexible budget focuses specifically on the impact of changes in prices of inputs and outputs.

Which of the Following Comparisons Best Isolates the Impact That