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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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