If a Static Budget Forecasted 100,000 Units to Be Sold

question 132

Multiple Choice

If a static budget forecasted 100,000 units to be sold in the fiscal year and actual units sold amounted to 120,000, what assumption could be made under a flexible budget process?

• A)Since the actual volume exceeds the budgeted volume, there is an unfavorable volume variance for output.
• B)Fixed costs would increase in the flexible budget due to the volume change.
• C)The effectiveness of the manager is in question.
• D)Variable costs will be higher than projected in the static budget due to the volume variance.

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