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:

Consumption Function

An economic formula that represents the relationship between total consumption and gross national income, indicating how spending is expected to increase with income.

Price Level

A measure of the average prices of goods and services in an economy at a specific time.

Consumption Function

A mathematical representation showing the link between total consumer expenditure and the gross national income.

Consumption Function

An economic concept that describes the relationship between total consumption and gross national income.