In What Situations Will a Static Budget Be Most Effective

question 47

Multiple Choice

In what situations will a static budget be most effective in evaluating a manager's effectiveness?

• A)The company has substantial fixed costs.
• B)The company has substantial variable costs.
• C)The planned activity levels match actual activity levels.
• D)The company has no fixed costs.

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Definitions:

Identical Firms

Companies that offer the same products or services and operate in the same market with similar strategies and resources.

Cost Data

Information regarding the expenses incurred in the production, operation, or acquisition of goods and services.

MC Curve

Represents the marginal cost curve, which shows the cost of producing an additional unit of a good or service.

Technological Advance

The development of new technologies and improvement of existing technologies to increase productivity or address new challenges.