The Static Budget Is NEVER Used to Compute Flexible Budget

question 149

True/False

The static budget is NEVER used to compute flexible budget variance or price and efficiency variances.

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Definitions:

Marginal Cost

Marginal cost is the increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Average Variable Cost

The cost of production that varies with the output level, calculated by dividing the total variable costs by the number of units produced.

Average Product

is the output per unit of input, such as the quantity of goods produced per labor hour, and is used to measure productivity.

Marginal Cost

The expenditure resulting from the creation of an additional unit of a product or service.