Which of the following is true of a static budget?
A) It is considered a good choice for benchmarks in preparing a performance report.
B) It divides costs into those that vary with units of production and those that are fixed with respect to unit-level drivers.
C) It provides a measure of the efficiency of a manager.
D) It provides expected cost for a given level of activity.
E) None of these are correct.

Question

Quizplus · Accepted Answer

A static budget provides expected costs for a given level of activity, but it does not divide costs into variable and fixed components, nor does it necessarily provide a good benchmark for evaluating performance. While it may give an indication of efficiency, it is not a comprehensive measure on its own.

Which of the Following Is True of a Static Budget