The type of budget that budgets standard costs for the actual volume of production is a:
A) standard budget.
B) static budget.
C) flexible budget.
D) fixed budget.

Question

Quizplus · Accepted Answer

A flexible budget is a budget that adjusts for changes in activity levels, whereas a static budget remains fixed regardless of changes in activity levels. A standard budget budgets standard costs, but it does not adjust for changes in activity levels. A fixed budget is a budget that remains unchanged over a period of time. Therefore, the best choice is a flexible budget, which is designed to adjust standard costs for the actual volume of production.

The Type of Budget That Budgets Standard Costs for the Actual