[amp_mcq option1=”Includes only fixed costs, while a variable budget includes only variable costs” option2=”Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales” option3=”Cannot be changed after the period begins, while a variable budget can be changed after the period begins” option4=”Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)” correct=”option4″]<\/p>\n
The correct answer is: D. Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)<\/strong><\/p>\n A fixed budget is a budget that is prepared for a single level of activity. It is based on the assumption that costs will remain constant at that level of activity. A variable budget, on the other hand, is a budget that is prepared for a range of activity levels. It takes into account the fact that costs will vary with the level of activity.<\/p>\n A fixed budget is useful for planning and control when the level of activity is relatively stable. However, it can be misleading if the level of activity changes significantly. A variable budget is more accurate than a fixed budget when the level of activity is variable. It allows managers to see how costs will change as the level of activity changes.<\/p>\n Here is a brief explanation of each option:<\/p>\n [amp_mcq option1=”Includes only fixed costs, while a variable budget includes only variable costs” option2=”Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales” option3=”Cannot be changed after the period begins, while a variable budget can be changed after the period begins” option4=”Is a plan … <\/p>\n\n