Which of the following comparisons best isolates the impact that changes in operating efficiency 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 isolates the impact that changes in operating efficiency have on performance by adjusting budgeted amounts based on actual activity levels. By comparing actual results to a flexible budget, the impact of changes in operating efficiency can be more accurately evaluated. The other options (static planning budget vs. flexible budget, static planning budget vs. actual results, and master budget vs. static planning budget) do not necessarily isolate the impact of changes in operating efficiency.

Which of the Following Comparisons Best Isolates the Impact That