A divisional manager is given an operating budget of $3.7 million for the coming year and is evaluated on the basis of the amount of output the division can produce based on that budget.On the basis of which of the following budget approaches is the divisional manager being remunerated?
A) Revenue budget approach
B) Cash flow budget approach
C) Expense budget approach
D) Profit budget approach
E) Capital budget approach

Question

Quizplus · Accepted Answer

Managers of a division may be given a fixed budget for resources and be evaluated on the amount of goods or services they can produce using those resources. This is a cost or expense budget approach.

A Divisional Manager Is Given an Operating Budget of $3