Which of the Following Statements About Budget Acceptance in an Organization

question 95

Multiple Choice

Which of the following statements about budget acceptance in an organization is true?

• A) The most widely accepted budget by the organization is the one prepared by top management.
• B) The most widely accepted budget by the organization is the one prepared by the department heads.
• C) Budgets are hardly ever accepted by anyone except top management.
• D) Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process.

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Definitions:

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue remaining after variable costs are subtracted, indicating how efficiently a company can produce and sell products.

Break-even Point

A point where total cost and total revenue are equal, indicating no profit or loss and where production or sales start becoming profitable.

Fixed Expenses

Overheads such as rent, employee salaries, and insurance that do not fluctuate with changes in sales or manufacturing volumes.

Contribution Margin Per Unit

The selling price per unit minus the variable cost per unit, indicating how much contributes to covering fixed costs and profit.