Which of the Following Budgeting Processes Is Least Likely to Motivate

question 43

Multiple Choice

Which of the following budgeting processes is least likely to motivate managers toward organizational goals?

• A) setting budget targets at attainable levels
• B) participation by subordinates in the budgetary process
• C) use of management by exception
• D) holding subordinates accountable for the items they control
• E) having top management set budget levels

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Definitions:

Break-even Sales

The amount of revenue needed to cover both fixed and variable costs, resulting in no profit or loss.

Variable Cost

Costs that change in proportion to the level of goods or services produced, such as materials and labor directly involved in production.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase profits by increasing sales.

Break-even Sales

The amount of revenue needed to cover both the variable and fixed costs of a business, resulting in zero profit or loss.