The Managers of a Division Are Given a Fixed Budget

question 94

Multiple Choice

The managers of a division are given a fixed budget and are then evaluated on the basis of their ability to produce goods or services.This is an example of a(n) _____________ budget approach.

• A) expense
• B) profit
• C) operating profit
• D) cash flow
• E) revenue

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Definitions:

Selling Expenses

Costs associated with the marketing and distribution of a product, including advertising, sales staff salaries, and shipping costs.

Perpetual Inventory

An inventory management system that continuously tracks the quantity and value of inventory, updating records in real-time as transactions occur.

Credit Terms

The conditions under which credit is extended by a lender to a borrower, including repayment time frame and interest rate.

Credit Terms

The conditions under which a seller extends credit to a buyer, including the repayment period and any discount for early payment.