Differences between the static budget and the flexible budget are due to _____.
A)problems of cost control
B)poor usage of material and labor
C)a combination of price and material variances
D)actual activity differing from expected activity levels

Question

Quizplus · Accepted Answer

The differences between the static budget and the flexible budget are usually due to actual activity levels differing from expected activity levels. A static budget is prepared based on a projected level of activity, while a flexible budget is adjusted based on the actual level of activity. Therefore, if the actual level of activity is higher or lower than initially projected, there will be differences between the two budgets. The other options listed may contribute to variances, but they are not the main reason for the differences between the two budgets.

Differences Between the Static Budget and the Flexible Budget Are