1S. A static budget is a) applicable to cost budgets but not to a sales budget b) modified or adjusted for changes in activity during the year e) appropriate in evaluating a manager's effectiveness in controlling fixed costs ) appropriate in evaluating a manager's effectiveness in controlling variable costs 16 A flexible budget a) is, in essence, a series of static budgets at different levels of activity b) can be prepared for each of the types of budgets included in a master buxlget e) increases budget allowances both directly and proportionately for variable costs as d) all of the above. 17. A managerial accountant 1. does not participate in the standard setting process 2. provides knowledge of cost behaviors in the standard setting process 3. provides input of historical costs to the standard setting process b. 2 2 and 3 d. 18. Top management's reaction to a difference between budgeted and actual sales often depends on a. whether the difference is favorable or unfavorable. b. whether management anticipated the difference. c. the materiality of the difference d. the personality of the top managers. Ifcosts are not responsive to changes in activity level, then these costs can be best described 19. a mixed. b. flexible c. variable d. fixed What is the primary difference between a static budget and a flexible budget? 20 a. The static budget contains only fixed costs, while the flexible budget contains only variable costs. b. The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels c. The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. d. The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold