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Comparing Revenues, Costs and Budgets

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Summer Company's static budget is based on a planned activity level of 25,000 units. At the same time the static budget was prepared, the management accountant prepared two additional budgets, one based on 20,000 units and one based on 30,000. The company actually produced and sold 29,000 units. In evaluating its performance, management should compare the company's actual revenues and costs to which of the following budgets?

(a) A budget based on 29,000 units
(b) A budget based on 25,000 units
(c) A budget based on 30,000 units
(d) A budget based on 20,000 units

Please give me some advice.

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Along with the answer to this multiple choice question, a detailed explanation is given to improve students' understanding of the problem.

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Dear student,

The correct answer is
(a) A budget based on 29,000 units

Explanation:

The company actually produced and sold 29,000 units. In evaluating its performance, management should ...

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