Asked by
Sudeep Panigrahi
on Dec 16, 2024Verified
A limitation of a static budget is that a favourable revenue variance based upon higher
than planned activity levels will usually result in unfavourable variable cost variances.
Static Budget
A budget prepared for a single level of activity, without changes for variations in sales or production volumes, often used for fixed expenses.
Revenue Variance
The difference between actual revenue and budgeted or forecasted revenue, indicating the effectiveness of business strategies.
Variable Cost Variances
Differences between the actual and expected or budgeted variable costs in the production process.
- Examine how standard costing contributes to decision-making and control in management.
Verified Answer
JF
Learning Objectives
- Examine how standard costing contributes to decision-making and control in management.