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Joseph Wilson Jr.
on Nov 13, 2024

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A static budget is not appropriate in evaluating a manager's effectiveness if a company has

A) substantial fixed costs.
B) substantial variable costs.
C) planned activity levels that match actual activity levels.
D) no variable costs.

Static Budget

A budget that remains unchanged regardless of changes in activity levels, sales volume, or other variables during the budget period.

Variable Costs

Costs that vary directly with the level of production or volume of output, which includes expenses like raw materials and labor directly involved in production.

Fixed Costs

Expenses that do not change with changes in production level or sales volume.

  • Distinguish between variable and fixed budgets.
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KJ
Kristine joy CatedrillaNov 19, 2024
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