A Divisional Manager's Performance Is Evaluated on the Basis of the Difference

question 63

Multiple Choice

A divisional manager's performance is evaluated on the basis of the difference between the sales revenues generated by that division and the cost of making those goods and services.On the basis of which of the following budget approaches is the divisional manager being remunerated?

• A) Profit budget approach
• B) Revenue budget approach
• C) Cash flow budget approach
• D) Cost budget approach
• E) Expense budget approach

---

Definitions:

Total Revenue

The aggregate revenue a business accumulates from its sales of products or delivery of services in a given period.

Relatively Inelastic

Describes a situation where the demand for or supply of a good or service is relatively unchanged when the price changes.

Legal Services

Professional services provided by lawyers or legal practitioners concerning consultations, legal documentation, representation, and proceedings in court.

Household Electricity

Electrical energy supplied to homes for powering appliances, lighting, and heating.