A fixed budget is a meaningful way to evaluate manufacturing performance if the activity level used for the budget is

Question

Quizplus · Accepted Answer

A fixed budget is meaningful only if the activity level used for the budget is similar to the actual activity level. Otherwise, the comparison between the budgeted and actual performance would not be valid. Choosing B or C would result in a less accurate evaluation, and choosing D without ensuring that the activity measure is similar to the actual activity level would also reduce the reliability of the budget evaluation.

A Fixed Budget Is a Meaningful Way to Evaluate Manufacturing