Which of the Following Is Not True of a Properly

question 226

Multiple Choice

Which of the following is not true of a properly executed budgetary cycle?

• A) deviations from plan are only investigated at the conclusion of the fiscal year as actual data can be finally compiled
• B) past performance and market feedback are considered in setting budget amounts
• C) specific financial and nonfinancial expectations are set
• D) during the fiscal year, managers investigate deviations from plans

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Definitions:

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additions to output will eventually decrease.

Law of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Total Cost

The aggregate of expenses related to the manufacturing of products or provision of services, which includes costs that stay the same as well as those that vary.

Fixed Costs

Expenses that do not vary with the level of production or business activity, such as rent, salaries, and insurance premiums, remaining constant regardless of output.