Which Statement Is True Concerning a Static Budget Report

question 54

Multiple Choice

Which statement is true concerning a static budget report?

• A)It considers performance at numerous activity levels.
• B)It is appropriate in evaluating a manager's effectiveness in controlling fixed costs.
• C)It should be used when the actual level of activity is materially different from the master budget activity level.
• D)It is most effective when evaluating a manager's effectiveness in controlling variable costs.

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Definitions:

Current Ratio

An indicator assessing the ability of a company to cover its obligations or debts falling due within one year.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle.

FICA Taxes Payable

Taxes that are due on employee and employer contributions to Social Security and Medicare.

Federal Income Taxes Payable

A liability account on the balance sheet representing the amount of income taxes a company owes to the government.