Identify the company with the greater risk when the original sales are lesser than the budget.

Question

Want to see the full answer?

Answer 1

Question

Chapter 11, Problem 16Q

To determine

Identify the company with the greater risk when the original sales are lesser than the budget.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Which of the following statements about margin of safety is false? a. Margin of safety measures the difference between budgeted revenues and breakeven revenues. b. If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety decreases. c. If only the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety increases. d. If only the fixed costs increase but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. e. none of the given answers is false.

23) The difference between budgeted sales revenue and break-even sales revenue is the: A) contribution-margin ratio. B) safety margin. C) contribution margin. D) operating leverage. E) target net profit.

Which of the following would be expected to result in a reduction in actual net profit compared to budgeted net profit in an accounting period? Please select all that apply. A decrease in the actual selling price of products compared to the budgeted selling price of products without a corresponding decrease in the actual costs of producing those goods. An increase in actual expenditure on non-current assets compared to budgeted expenditure on non-current assets. A more productive workforce than budgeted. An increase in the actual cost of raw materials compared to the budgeted cost of raw materials without a corresponding increase in the actual selling price of goods produced.