Laurie inc.'s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $25,000. a flexible budget for 12,000 units of production would show
a. direct materials of $60,000, direct labor of $52,800, fixed utilities of $6,000, and supervisor salaries of $25,000
b. direct materials of $72,000, direct labor of $52,800, fixed utilities of $5,000, and supervisor salaries of $25,000
c. the same cost structure in total
d. total variable costs of $159,800
a disadvantage of static budgets is that they?
a. do not show possible changes in underlying activity levels
b. are dependent on previous year's actual results
c. show the expected results of a responsibility center for several levels of activity
d. cannot be used by service companies