Which of the Following Is NOT True Regarding Top-Down Budgeting

question 2

Multiple Choice

Which of the following is NOT true regarding top-down budgeting?

• A) It is based on the collective judgments of top and middle managers.
• B) Overall project costs are estimated by top and middle managers and then passed on to the next lower level.
• C) The overall budget cost is generally not very accurate.
• D) Overlooking small but important tasks can lead to a serious budgetary problem.
• E) All of the above are true concerning top-down budgeting.

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Definitions:

Isocost Line

A graphical representation in economics that shows all possible combinations of inputs that cost the same total amount.

Slope

A measure of the steepness or incline of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Prices of Capital

Prices of capital refer to the cost of acquiring, maintaining, and using productive assets such as buildings, machinery, and equipment for producing goods or services.

Prices of Labor

Generally refers to the wages received by workers for their labor, determined by the supply and demand for labor in the market.