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The basic difference between a static budget and a flexible budget is that:
Select one:
a. A flexible budget considers only variable costs, but a static budget considers all costs.
b. Flexible budgets allow management latitude in meeting goals, whereas a static budget is based on a fixed standard.
c. A static budget is for an entire production facility, but a flexible budget is applicable only to a single department.
d. A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.
Expert Answer
d. A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.
A static budget assumes one operating level whereas a flexible budget allows evaluations of anticipated costs dependent on the production level achieved
