Which Problem Might Be a Result of an Unrealistic Budget

question 14

Multiple Choice

Which problem might be a result of an unrealistic budget?

• A)profitable operations
• B)reduced employee morale
• C)favourable operating activity
• D)minimal differences between actual and budgeted amounts

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Definitions:

Operating Cash Flow

The amount of money generated by a company's regular business operations, indicating its ability to pay bills, repay debts, and reinvest in its business.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decline in value over time.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, or insurance premiums.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor.