Which One of the Following Is a Reason That a Company

question 4

Multiple Choice

Which one of the following is a reason that a company may have significant deviations from budgeted performance?

• A)Actual results were compared to flexible budget amounts instead of static budget amounts.
• B)The budget was approved by the budget committee.
• C)Economic conditions may have changed since the plan was developed.
• D)A company has substantial variable costs.

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Definitions:

Total Revenue

The overall amount of money generated by a business from its activities, such as sales of goods or services, before any expenses are subtracted.

Fixed Costs

Expenses that remain constant regardless of production or sales levels, like lease payments, wages, and coverage plans.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials or commission on sales.

Fixed Expenses

Costs that do not change with the level of production or business activity.