Redoing the Budget to Actual Output Is Most Useful

question 32

Multiple Choice

Redoing the budget to actual output is most useful:

• A) for planning purposes.
• B) to calculate profitability accurately.
• C) as a tool to help evaluate performance.
• D) when actual output equals budgeted output.

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Definitions:

Investment

Allocation of resources, such as capital or time, in anticipation of generating income or profit in the future.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear.

Straight-Line Method

A method of calculating depreciation or amortization by spreading the cost of an asset evenly across its useful life.

Accumulated Depreciation

The total amount of depreciation expense allocated to a fixed asset since it was put into use.