Which of the Following Is an Example of the Coordination

question 20

Multiple Choice

Which of the following is an example of the coordination and communication function of the budgeting process?

• A) A budget demands integrated input from different business units and functions.
• B) Employees are motivated to achieve the goals set by the budget.
• C) Each department acts independently because the department manager will be evaluated on actual departmental results.
• D) A budget adjustment in one department will have no effect on other departments.

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Definitions:

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors are valid.

Sunk Cost

A past cost that has already been incurred and cannot be recovered, which should not influence future financial or business decisions.

Net Operating Income

The profit generated from a company's ordinary, day-to-day business operations, calculated by subtracting operating expenses from gross profit.

Contribution Approach

A method of income statement presentation where variable costs are deducted from sales to find the contribution margin.