Question

The primary difference between a static budget and a flexible budget is that a static budget
a. is suitable in volatile demand situation while flexible budget is suitable in a stable demand situation.
b. is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales.
c. includes only fixed costs, whereas a flexible budget includes only variable costs.
d. is a plan for a single level of production, whereas a flexible budget can be converted to any level of production.

Answer 1

Answer:

The correct option is D

Explanation:

The static budget is the kind of budget in which the amounts will not change or vary even though the volume changes, Whereas the flexible budget, is the one where the budget of the sales commissions expense would be mentioned as a percentage of sales.

Static budget is one which is prepared or made grounded on a single level of output for a given year. And the flexible budget could be converted to any production level.