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A budget prepared for a single, standard level of activity is a
Afixed budget
Bflexible budget
Ccash budget
Dzero based budget
Answer & Solution
Correct answer: A. fixed budget
1. Budgets differ by how they treat the level of activity.
2. A fixed budget is prepared on the basis of a standard or fixed level of activity.
3. It is not adjusted when the actual level turns out different.
4. A flexible budget, by contrast, recognises several activity levels.
_Source: ICAI Cost and Management Accounting Ch15 'Budgets and Budgetary Control', section 15.7_
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