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

question 140

Multiple Choice

Summer Company's static budget is based on a planned activity level of 25,000 units. Later, the company's management accountant prepared a budget based on 30,000 units. The company actually produced and sold 29,000 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 29,000 units
• B) A budget based on 30,000 units
• C) A budget based on 25,000 units
• D) Either a budget based on 29,000 units or a budget based on 25,000 units

---

Definitions:

Classical-Conditioning Principles

The psychological mechanisms and rules through which organisms learn to associate stimuli and anticipate events, based on the work of Ivan Pavlov.

Frank

Open, honest, and direct in speech or writing, especially when dealing with unpalatable matters.

Jellyfish

Aquatic animals belonging to the phylum Cnidaria, known for their gelatinous, umbrella-shaped bodies and trailing tentacles.

Overtime Pay

Additional compensation provided to employees who work beyond the standard work hours as defined by law or contract.