Which of the Following Is a Disadvantage of Using the Standards

question 4

Multiple Choice

Which of the following is a disadvantage of using the standards developed by a firm itself to develop a budget?

• A) A firm's inefficiencies will be part of the data.
• B) They are not based on realized benchmarks and can be unrealistic
• C) The expected future changes are not included in the standards.
• D) The flexible-budget amounts are difficult to determine.

---

Definitions:

Insurer

A company or entity that provides insurance policies to protect individuals or organizations against financial loss or damage.

Premium

A sum paid periodically to the insurer by the insured for covering their risk.

Potential Loss

A hypothetical amount of money that a business or individual could lose in the future due to risks.

Risk

The potential for losing something of value or for an undesirable outcome, often assessed in decisions involving finance, safety, and health.