In a Company with Different Business Units,individual Managers Make Decisions

question 151

Multiple Choice

In a company with different business units,individual managers make decisions by changing various assumptions of its budget in order to determine how the modifications would affect the operational and financial results.This is an example of ________.

• A) financial statement analysis
• B) responsibility accounting
• C) sensitivity analysis
• D) zero-based budgeting

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Definitions:

Direct Labour

Workforce directly involved in manufacturing goods or providing services, whose costs are directly attributed to products or services.

Merchandise Inventory

The goods available for sale to customers in retail or wholesale businesses, valued at lower of cost or market value on the balance sheet.

Credit Sales

Transactions where goods or services are provided to a customer with an agreement to pay at a later date.