A Static Budget Is

question 80

Multiple Choice

A static budget is

• A) considered a good choice for benchmarks in preparing a performance report.
• B) computes expected costs for a range of activity levels.
• C) compares actual costs with budgeted costs.
• D) prepared for a particular level of activity.
• E) None of these are correct.

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Definitions:

Calendar Time

The concept of time as measured by calendar units, such as days, months, and years, used in planning and scheduling.

Long Run

An economic phase where all elements of production and expenses can fluctuate, enabling complete adaptation to any alterations.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, equating to the opportunity cost of capital and resources.

Implicit Costs

Indirect expenses that do not involve a direct cash outlay but represent an opportunity cost, such as using resources for one purpose over another.