When a Flexible Budget Is Used and Actual Output Exceeds

question 23

Multiple Choice

When a flexible budget is used and actual output exceeds forecasted output, the percentage change in total expenses in the restated or flexed budget will be

• A) Greater than the percentage increase in output
• B) Equal to the percentage increase in output
• C) Less than the percentage increase in output
• D) Zero

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Definitions:

Market Efficiency

A scenario where all existing information is entirely accounted for in the prices of assets, rendering it impossible to consistently outperform the market average in terms of returns.

Government

An organized system that establishes rules and regulations, governs, and provides services to its constituents.

Taxes

Essential fees levied by authorities on personal and corporate income, or added onto the costs of selected merchandise, services, and operations.

Tax Revenue

Income earned by the government from taxing individuals and businesses.