Answered: resource constraint?

Business

Accounting

resource constraint?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 1MC: Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing...

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

1) Which of the following is a resource constraint?

a) Machine hours available

b) Sales commissions

c) Cost per unit

d) Budgeted overhead

2) Development of a budget ____________.

a)Is required by GAAP.

b) Is required by tax authorities.

c) Enhances communication and coordination among managers.

d) Enhances borrowing limit of the firm.

Which of the following statements relating to budgeting is NOT true?

a) A budget is a formal document that quantifies a company’s plans for achieving its goals.

b)Budgets are useful in the control process because they provide a basis for evaluating performance.

c) A bottom-up approach to budgeting involves substantial input from lower level managers.

d) Most managers believe that budgeting is more successful when a top-down approach rather than a bottom-up approach is used.

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