Which of the Following Is Not a Benefit of a Careful

question 56

Multiple Choice

Which of the following is not a benefit of a careful and thorough budgeting process?

• A)Budgeting increases management's awareness of the company's external economic environment.
• B)Budgeted net income assures the company of operating profitably.
• C)The budget may provide advance warning of pending problems.
• D)Budgets provide a yardstick for evaluating future performance.

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Definitions:

Average Total Cost

The per unit cost of production, calculated by dividing total cost by the quantity of output produced.

Fixed Cost

Costs that do not change with the level of production or output, such as rent or salaries.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the average cost per unit.