Multiple Choice Question 56 Oriole Company prepared a 2016 budget for 120000 uni

Question

Multiple Choice Question 56 Oriole Company prepared a 2016 budget for 120000 units of product. Actual production in 2016 was 145000 units. To be most useful, what amounts should a performance report for this company compare? The actual results for 145000 units with the original budget for 120000 units. O The actual results for 145000 units with last year's actual results for 149000 units. O The actual results for 145000 units with a new budget for 145000 units. O It doesn't matter. All of these choices are equally useful.

Explanation / Answer

The circumstances to an entity in one year could be different from that of next year.

The budget is prepared by estimating the prospective revenues and expenses that are going to arise in that year of budget.

So the performance report should compare the budgeted results of 120000 units with the actual result of 145000 units to be most useful.

The last year's output cannot be compared to this year beacuse there may be change in economic conditions that may favour or hinder entity's production.

So the answer is Option A.

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.