The Primary Measure of Superior Performance When an Incremental Budget

question 10

Multiple Choice

The primary measure of superior performance when an incremental budget is used

• A) Are total actual expenses less than or equal to the budget
• B) Is actual cost per output less than or equal to the budget
• C) Is marginal cost per output less than or equal to the budget
• D) Is actual cost per outcome less or equal to the budget

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Definitions:

Current Liabilities

Financial obligations a company owes and is required to settle within a year.

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Acid-Test Ratio

A financial metric comparing a company's most liquid assets (excluding inventory) to its current liabilities, used to assess short-term solvency.