Since Internal Users Have Access to All the Underlying Data

question 72

Multiple Choice

Since internal users have access to all the underlying data used for managerial accounting reports,

• A)They can create reports that suit their particular decision making needs.
• B)There is no need to use financial data in making decisions.
• C)Both they can create reports that suit their particular decision making needs and there is no need to use financial data in making decisions.
• D)Neither they can create reports that suit their particular decision making needs nor there is no need to use financial data in making decisions.

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Definitions:

Monthly Sales

The cumulative income derived from selling activities over a given month.

Margin Of Safety

A financial ratio that measures the difference between actual sales and the break-even point, indicating the cushion a company has before incurring a loss.

Break-Even Sales

The point at which total revenues equal total costs, resulting in zero profit.

Operating Leverage

A financial metric that measures the degree to which a firm or project can increase operating income by increasing revenue.