Which of the Following Is a Disadvantage of an Activity-Budgetary

question 61

Multiple Choice

Which of the following is a disadvantage of an activity-budgetary system?

• A)It supports continuous improvement.
• B)It supports process management.
• C)It emphasizes cost reduction assuming one unit-based driver.
• D)It helps improve the efficiency of necessary activities.

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Definitions:

EBIT

Earnings Before Interest and Taxes - an indicator of a company's profitability that calculates income without tax expenses and interest expenses.

Straight Line

A method of allocating the cost of a tangible asset over its useful life in equal installments.

Net Income

The net income a company achieves once all costs and taxes are subtracted from its total revenues.

Cash Flow

The net amount of cash and cash-equivalents moving into and out of a business, crucial for assessing liquidity, flexibility, and overall financial performance.