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CMA Intermediate · Cost Accounting · Budget and Budgetary Control

In budgetary control, the budget that is prepared for a single level of activity and does not adjust itself to the actual volume achieved is called a:

This is a fixed budget. It is drawn up for one predetermined activity level and stays unchanged even if actual output differs, unlike a flexible budget, which is recast for the activity level actually achieved to allow fair comparison.

  1. AFlexible budget
  2. BFixed budgetCorrect
  3. CZero-base budget
  4. DRolling budget

Explanation

A fixed budget is designed for one predetermined level of activity and is not revised when actual activity differs. A flexible budget, in contrast, is recast for different activity levels. Zero-base and rolling budgets differ in how they are built or updated, not in being single-level.

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