The Best Budget System to Support Department Managers in Their

question 2

Multiple Choice

The best budget system to support department managers in their role of facilitating and controlling production processes is:

• A) incremental budgeting.
• B) activity-based budgeting.
• C) flexible budgeting.
• D) zero-base budgeting.
• E) program budgeting.

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Definitions:

Fair Market Value

The price at which property would sell on the open market between a willing buyer and a willing seller.

Noncumulative Nonparticipating

Refers to a type of preferred stock that does not allow for the accumulation of unpaid dividends if they are not declared by the board, nor does it participate in the extra profits of the company.

Cash Dividends

Payments made to shareholders out of a corporation's earnings in the form of cash.

Stable Earnings

Earnings that show little variability and predictability over a period, indicative of financial stability in a company.