Asked by Johnny Gomez on Jun 25, 2024
Verified
Which one of the following would be the same total amount on a flexible budget and a static budget if the activity level is different for the two types of budgets?
A) Direct materials cost
B) Direct labor cost
C) Variable manufacturing overhead
D) Fixed manufacturing overhead
Flexible Budget
A flexible budget adjusts according to the actual levels of activity experienced, allowing for more accurate comparisons of budgeted to actual performance.
Static Budget
A budget that is set for a specific level of activity and does not change or adjust with the actual level of activity achieved.
Fixed Manufacturing Overhead
The set costs involved in producing a product that do not change with the level of production, such as rent, salaries, and utilities.
- Master the concept of flexible budgeting and its adaptability to diverse activity intensities.
Verified Answer
Learning Objectives
- Master the concept of flexible budgeting and its adaptability to diverse activity intensities.
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