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Multiple choice

When using a flexible budget, a decrese in activity within the relevant range:
1-decreases variable cost per unit
2-decreases total costs
3-increases totoal fixed costs
4-increases variable cost per unit

A major disavantage of static budge is:
1- the difficulty in developing such a budget due to high cost of gathering the necessary information.
2-the cost behavior pattern of manufacturing overhead, which is primarily fixed.
3-that cost variances between actual and budget on a static budget result from comparing actual costs to one level of activity to budget costs at a different level of activity
4-their lenght and complexity.

Solution Preview

The correct option is 2- decreases total cost
In a flexible budget, the variable costs will decrease with activity while the fixed costs remain the ...

Solution Summary

The solution explains two miltiple choice questions relating to flexible and static budget