The Primary Difference Between a Static Budget and a Flexible

question 35

Multiple Choice

The primary difference between a static budget and a flexible budget is that a static budget

• A)is suitable in a volatile demand situation while a 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 activity, whereas a flexible budget adjusts for changes in the activity level

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Definitions:

Employer

An organization or individual that hires employees to perform specific tasks in exchange for compensation.

Vacation Pay Expense

The cost incurred by an employer for the amount of vacation time accrued to employees.

Payroll Register

A detailed document that lists employees' pay rates, hours worked, deductions, and net pay during a pay period.

Total Net Pay

The amount of money an employee receives after all deductions, including taxes and benefits, have been subtracted from their gross pay.