To Overcome Possible Problems with Budgets That Are Developed Only

question 71

Multiple Choice

To overcome possible problems with budgets that are developed only by top level managers, an alternative is to use:

• A) Activity based budgets
• B) Authoritative budgets
• C) Flexible budgets
• D) Participative budgets

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Definitions:

Relevant Range

The span of activity or production volume over which fixed and variable costs remain constant on a per-unit basis.

Direct Costs

Direct costs are expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Merchandising Company

A business that purchases finished goods for resale, aiming to make a profit without changing the form of the goods.

Cost of Goods Sold

The direct costs related to the production of the goods that a company sells, including materials and labor.