Misalignment Between the ________ Stressed in Budgets and ________ Used

question 43

Multiple Choice

Misalignment between the ________ stressed in budgets and ________ used to reward employees and managers can limit the advantages of budgeting.

• A) performance goals; participative goals
• B) performance goals; performance measures
• C) sales goals; bonuses
• D) resource goals; bonuses

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Definitions:

Operating Income

The revenue accrued from a firm's foundational business activities, prior to the removal of interest and tax charges.

Fixed Costs

Expenses that do not vary with production volume, such as rent, salaries, and insurance premiums.

Zero Profit

A situation where a business's revenues exactly match its expenses, resulting in no net profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit contributes to covering fixed costs.