Question

What is the primary difference between a static budget and a flexible budget? the static budget contains only fixed costs, while the flexible budget contains only variable costs.
b. the static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.
c. the static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management.
d. the static budget is prepared only for units produced, while a flexible budget reflects the number of units sold. the static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. the static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. the static budget is prepared only for units produced, while a flexible budget reflects the number of units sold?

Answer 1

What is the primary difference between a static budget and a flexible budget? The static budget contains only fixed costs, while the flexible budget contains only variable costs. Flexible budgeting allows for variables to change the budget and allotted costs for the budget. When you have a flexible budget you are understanding of things that could "come up" and have extra money open to use there. In a static budget, you are strict on where your money is spent and you have a budget just for those costs.