A Limitation of Comparing a Company's Performance Against Actual Results

question 67

Multiple Choice

A limitation of comparing a company's performance against actual results of last year is that

• A)it includes adjustments for future conditions.
• B)feedback is no longer a possibility.
• C)the benchmark may be unrealistic.
• D)past results can contain inefficiencies of the past year.
• E)the budgeting time period is set at one year.

Differentiate among the various types of market competition.

Identify the effects of price changes on consumer behavior and market outcomes.

Comprehend the concept of equilibrium price and how market dynamics strive to achieve it.

Understand the economic decision-making process in both for-profit and not-for-profit organizations.

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Definitions:

Standard Quantity

The expected or planned amount of materials or inputs required for the production of a unit of product, based on efficient operations.

Actual Quantity

The real amount or volume of inputs used in the production process, as opposed to the amount budgeted or planned.

Standard Cost Card

A detailed listing of the standard amounts of inputs and their costs that are required to produce one unit of a specific product.

Variable Cost

Costs that change in proportion to changes in the volume of output or activity.