The Value of Budgets to Managers in Their Strategic Analysis

question 33

Multiple Choice

The value of budgets to managers in their strategic analysis and planning is enhanced by

• A)value based budgeting.
• B)conducting sensitivity analysis.
• C)the lines of responsibility in the value chain.
• D)the current organizational structure.
• E)the operating plan.

Distinguish between various price indices like Core CPI, PPI, and their relevance to consumer costs and inflation.

Learn about the historical occurrence of inflation and deflation in the U.S. economy.

Understand the limitations and advantages of using CPI and other indices for measuring inflation.

Understand the process of calculating the Consumer Price Index (CPI).

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Definitions:

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as salaries of managers, depreciation of manufacturing equipment, and rent of the factory building.

Deferred in Inventories

A situation where costs incurred in acquiring or producing inventory are postponed from being recognized as expenses until the goods are sold.

Released from Inventories

The process of moving goods from inventory to be used in production or to be sold, thereby reducing the inventory account.

Unit Product Cost

The total cost (both direct and indirect) to produce a single unit of a product.