The Basic Difference Between a Master Budget and a Flexible

question 147

Multiple Choice

The basic difference between a master budget and a flexible budget is that a:

• A) flexible budget considers only variable costs but a master budget considers all costs.
• B) flexible budget allows management latitude in meeting goals whereas a master budget is based upon a fixed standard.
• C) master budget is for an entire production facility but a flexible budget is applicable to single departments only.
• D) master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.

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Definitions:

Social Loafing

The phenomenon wherein individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Group Polarization

A phenomenon where discussions within a group lead to the adoption of more extreme positions or attitudes than the members initially had.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or expectations.

Social Loafing

The phenomenon where individuals exert less effort when working in a group compared to when working alone, due to perceived diffusion of responsibility.