A Budgeting Process in Which Middle and Lower-Level Managers Set

question 104

Short Answer

A budgeting process in which middle and lower-level managers set departmental budget targets in accordance with overall company revenues and expenditures specified by top management is called _____ budgeting.

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Definitions:

Residual Income

The excess of divisional income from operations over a “minimum” acceptable income from operations.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit of an investment by its cost.

Income From Operations

Income from operations refers to the profit realized from a firm's core business activities, excluding deductions for interest and taxes.

Office Salaries Expense

The costs associated with paying salaries to administrative and office employees.