Question

Which of the following is a difference between a static and a flexible budget? Multiple Choice Static budgets are based on the same per unit variable amount, whereas flexible budgets are based on multiple per unit variable amounts. Static budgets are based on single estimate of volume, whereas flexible budgets show estimated costs and revenues at a variety of activity levels. Static budgets use the same fixed cost amounts, whereas flexible budgets change the amount of fixed costs at different levels of activity. None of these answers is correct.

Answer 1

Answer:

None of these answers is correct.

Explanation:

A static budget is also referred to as a fixed budget.  A static budget remains constant throughout a period regardless of changes in inputs.  A static budget is prepared at the beginning of a period. It is an informed forecast of incomes and production in the coming year.  

A flexible budget adjusts to changes in volumes or activity. A flexible budget is prepared using the actual activity level and incomes at the end of a period. A comparison is then made with the actual expenses to evaluate the performance for the year.