The static budget is NEVER used to compute flexible budget variance or price and efficiency variances.

Question

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The static budget is used to compute the budgeted amount for a given level of activity. The flexible budget is used to compute the budgeted amount for the actual level of activity. The flexible budget variance is the difference between the actual amount and the flexible budget amount. The price and efficiency variances are the differences between the actual amount and the static budget amount.

The Static Budget Is NEVER Used to Compute Flexible Budget