Which of the Following Is More Characteristic of a Decentralized

question 175

Multiple Choice

Which of the following is more characteristic of a decentralized than a centralized business structure?

• A)The firm's environment is stable.
• B)There is little confidence in lower-level management to make decisions.
• C)The firm grows very quickly.
• D)The firm is relatively small.

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Definitions:

Fixed Budget

A budget that remains unchanged and is based on a fixed level of activity, regardless of actual levels of output, sales, or revenue throughout the budget period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate financial planning and analysis.

Contribution Margin

The difference between sales revenue and variable costs, showing how much revenue contributes to covering fixed costs.

Fixed Budget

A budget that remains constant regardless of changes in the level of activity or volume, typically used for planning purposes.