Question

Static and flexible budgets are similar in that: Multiple Choice

a. They both are prepared for multiple activity levels.
b. They both are based on the same per unit variable amounts and the same fixed costs.
c. None of these answers is correct.
d. They both concentrate solely on costs.

Answer 1

The correct answer is letter "B": They both are based on the same per unit variable amounts and the same fixed costs.

Step-by-step explanation:

Static budgets are estimates that use the same fixed cost amounts, while flexible budgets change the number of fixed costs at different levels of production. However, both of them use the same per unit variable amounts as well as the same fixed costs in the manufacturing process.