Before Remuneration,a Divisional Manager Is Told to Maximize the Sales

question 21

Multiple Choice

Before remuneration,a divisional manager is told to maximize the sales of his division.On the basis of which of the following budget approaches will the divisional manager be remunerated?

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

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Definitions:

Base Year

A specific year chosen as a point of comparison for financial or economic data over time.

Current Position Analysis

The evaluation of a company’s ability to pay its current liabilities.

Short-Term Creditors

Entities or individuals who have provided financial credit to a company with the expectation of being repaid within a short period, usually within a year.

Comparative Financial Statements

Financial statements that present the financial position, results of operations, and cash flows of an entity for multiple periods side-by-side for comparison.