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