Which of the following statements is true? It is recommended when making a budget to incorporate a conservative amount of slack to account for unexpected events. An example of an unfavorable variance is when actual expenses are less than budgeted expenses. Budgets are estimates for revenue and expenditures that are used to set, achieve, and evaluate an organization’s goals. Static budgets are generated at the beginning of the year and then subsequently updated for the actual level of volume that occurs during the period. An example of a favorable variance is when actual revenue is less than budgeted revenue.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Which of the following statements is true?
It is recommended when making a budget to incorporate a conservative amount of slack to account for unexpected events.
An example of an unfavorable variance is when actual expenses are less than budgeted expenses.
Budgets are estimates for revenue and expenditures that are used to set, achieve, and evaluate an organization’s goals.
Static budgets are generated at the beginning of the year and then subsequently updated for the actual level of volume that occurs during the period.
An example of a favorable variance is when actual revenue is less than budgeted revenue.
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