A Static Budget Report

question 23

Multiple Choice

A static budget report

• A) shows costs at only 2 or 3 different levels of activity.
• B) is appropriate in evaluating a manager's effectiveness in controlling variable costs.
• C) should be used when the actual level of activity is materially different from the master budget activity level.
• D) may be appropriate in evaluating a manager's effectiveness in controlling costs when the behavior of the costs in response to changes in activity is fixed.

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Definitions:

Duration

The length of time that something continues or exists.

Capacity

The ability or power to do, experience, or understand something; often used in legal, psychological, and health-related contexts.

Forgetting

The inability to access a memory from long-term storage.

State-Dependent Memory

The phenomenon whereby information learned in a particular state of mind (e.g., mood or consciousness) is more readily recalled when in the same state.