Multiple Choice Question 56 Your answer is incorrect. Try again. riole Company p

Question

Multiple Choice Question 56 Your answer is incorrect. Try again. riole 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? Ö The actual results for 145000 units with the original budget for 120000 units. ? 0 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 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Solution: Option(c) is correct i.e. the actual results for 145000 units with a new budget for 145000 units.

Explanation: The situations to an entity in one year could be different from that of next year. The budget is prepared considering the current situation. If due to changes in circumstances the actual results differ from the budget then the new budget with actual results should be made to compare the performance and to find out the reason of difference.

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