Managerial Accounting: Primary Objective of Budgeting
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The primary objective of budgeting is to create a detailed plan that guides managers in the acquisition and use of an organization's resources.
a. True
b. False
The primary objective of budgeting is to create a detailed plan that guides managers in the acquisition and use of an organization's resources.
a. True
b. False
CVP analysis is a tool managers use to prepare the operating expense budget.
a. True
b. False
All costs will vary in proportion to various levels of sales.
a. True
b. False
The contribution margin income statement emphasizes CVP relationships.
a. True
b. False
Percentage change between years is calculated as the amount of the change divided by the base-year amount.
a. True
b. False
Ratio analysis is used to evaluate the reasonableness of budget assumptions.
a. True
b. False
The current ratio measures liquidity.
a. True
b. False
There are two types of variable cost variances: volume variances and price variances.
a. True
b. False
All variances should be investigated.
a. True
b. False
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