Which of the following statement is true? Multiple Choice The performance evaluation of a cost center is typically based on the static budget variance. static budget is constructed using standard costs while the flexible budget uses a zero-based approach. static budget is more useful for performance measurement purposes. static budget is used in the service industry while flexible budget is used for manufacturing sector only. static budget is prepared for a single level of activity while a flexible budget can be flexed for different activity levels.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Which of the following statement is true?
-
The performance evaluation of a cost center is typically based on the static
budget variance . -
static budget is constructed using
standard costs while the flexible budget uses a zero-based approach. -
static budget is more useful for performance measurement purposes.
-
static budget is used in the service industry while flexible budget is used for manufacturing sector only.
-
static budget is prepared for a single level of activity while a flexible budget can be flexed for different activity levels.
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