Which of the Following Statements About a Budget Is Correct

question 56

Multiple Choice

Which of the following statements about a budget is correct?

• A) It is an entity's short-term plan expressed quantitatively.
• B) It is an entity's long-term plan expressed quantitatively.
• C) Budget targets are always impossible to meet.
• D) Budgets must be prepared by all types of entities.

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Definitions:

Output

The quantity of goods or services produced by a company during a specific period.

Indirect Labor

Labor costs not directly attributable to the production of goods or services, such as salaries for supervisors or maintenance staff.

Direct Labor-Hours

Direct labor-hours refer to the total hours worked by employees directly involved in producing a product.

Spending Variance

The difference between the budgeted amount of spending and the actual amount spent.