In What Situations Will a Static Budget Be Most Effective

question 47

Multiple Choice

In what situations will a static budget be most effective in evaluating a manager's effectiveness?

• A)The company has substantial fixed costs.
• B)The company has substantial variable costs.
• C)The planned activity levels match actual activity levels.
• D)The company has no fixed costs.

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Definitions:

Invisible Hand Principle

A metaphor described by Adam Smith to illustrate how individuals pursuing their own self-interest can benefit society overall, as if guided by an unseen hand.

Allocation of Resources

The process of distributing available resources among various competing needs and uses to achieve desired objectives and outcomes.

Self-Interest

The action of working towards one's personal advantage, often considered a driving force behind economic decisions.

Equitable Distribution

A legal principle used in family law to fairly divide property and assets between partners during a divorce.