After Comparing Budgets with the Actual Results,the Feedback Allows Managers

question 179

True/False

After comparing budgets with the actual results,the feedback allows managers to determine what,if any,corrective action should be taken.

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Definitions:

Fixed Cost

Costs that remain unchanged regardless of the level of production or business activity within a certain range.

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Break-Even Point

The point at which total costs equal total revenues, indicating that a business is neither making a profit nor incurring a loss.

Contribution Margin Ratio

The contribution margin ratio is a financial metric indicating the proportion of sales revenue that exceeds variable costs and is available to cover fixed costs and generate profit.