Four Months into the New Budget It Is Learned That

question 33

Multiple Choice

Four months into the new budget it is learned that there will be a major increase in the cost of raw materials. The most appropriate action is to:

• A) leave the master budget intact.
• B) revise the master budget to incorporate the cost increase in raw materials.
• C) hold the purchasing department responsible for not anticipating the cost increase.
• D) no action is necessary.

Acknowledge the suitability of team evaluations for companies with a total-quality management philosophy.

Identify the training needs for supervisors in performance evaluation programs.

Describe the bias and subjectivity in trait and results-oriented methods.

Understand the time consumption and drawbacks of the essay method in performance evaluations.

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Definitions:

Net Income

What a company ultimately makes, after subtracting everything it spends including taxes and costs, from the revenue it generates.

Average Rate

The mean rate or level for a particular variable over a specified period, often used in reference to interest or exchange rates.

Present Value Methods

Techniques used to determine the current worth of a future stream of cash flows, discounted at a particular rate.

Capital Investment Proposals

Proposals for projects or investments that require a substantial amount of capital, often evaluated for their potential to generate future cash flows.