Spark Company's Static Budget Is Based on a Planned Activity

question 57

Multiple Choice

Spark Company's static budget is based on a planned activity level of 45,000 units.At the same time the static budget was prepared,the management accountant prepared two additional budgets,one based on 40,000 units and one based on 50,000.The company actually produced and sold 49,000 units.In evaluating its performance,management should compare the company's actual revenues and costs to which of the following budgets?

• A) A budget based on 40,000 units
• B) A budget based on 45,000 units
• C) A budget based on 49,000 units
• D) A budget based on 50,000 units

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Definitions:

Instrumental Value

The importance or worth of something based on its utility in achieving an end or serving as a means to facilitate a goal.

Rationality Strategy

An approach that emphasizes logical, systematic decision-making and problem-solving.

Gift Certificate

A pre-paid voucher that can be used as payment for goods or services at a specific retailer or establishment.

Denial of Injury

A defense mechanism or rationalization where an individual justifies harmful actions by claiming no one was hurt or the harm was insignificant.