Q3RQ - Horngren'S Financial And Managerial Accounting

Question

Question: What is a static budget performance report?

Step-by-Step Solution

Answer

Answer

The report reflects the difference between the actual activity level achieved by the business entity and the level of activity stated in the static budget.

Step 1: Definition of Performance Report

The performance report is the report that shows the achievement of the business entity by making a comparison between the actual results of the business activities with the budget prepared by the business entity.

Step 2: Static budget performance report

The performance report shows the business entity's information on the static budget and the actual operating results. It is done to determine the static budget variance. A static budget is prepared for only one level of activity. The deviation from the level established in the static budget is used to determine the business performance.