Fill in the missing prepositions and adverbs
of (5), against (3), toward (2), hence (1), at (3), since (1), from (2), on (1), to (1)

A static budget has two characteristics:

It is geared ___ only one level ___ activity.

Actual results are always compared ___ budgeted costs ___ the original budget activity level.

A flexible budget differs ___ a static budget ___ both ___ these points. First, it does not confine itself ___ only one level ___ activity, but rather is geared ___ a range ___ activity. Second, actual results do not have to be compared ___ budgeted costs ___ the original budget activity level. ___ the flexible budget covers a range ___ activity, if actual costs are incurred ___ different activity level ___ what was originally planned, then the manager is able to construct a new budget, as needed, to compare ___ actual results. ___, the term flexible budget.

however (1), in (4), along with (1), by (2), as well as (1), to (2), only (1), of (3), for (3), at least (1), on (1), with (1).

Should the flexible budget contain fixed costs ___ variable costs? The term flexible budget implies variable costs ___ . As a practical matter, ___ , most firms include fixed overhead costs ___ the budget as well.

Fixed costs are often included ___ the flexible budget ___ ___ two reasons. First, ___ the extent that a fixed cost is controllable ___ a manager, it should be included ___ the evaluation ___ his or her performance. Such costs should be placed ___ the manager’s performance report, ___ the variable costs ___ which he or she is responsible. And second, fixed costs are needed ___ the flexible budget ___ product costing purposes. Overhead costs are added ___ units ___ product ___ means ___ the predetermined overhead rate. The flexible budget provides the manager ___ the information needed to compute this rate.

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