If a division managers compensation is based upon the divisions net income the

If a division managers compensation is based upon the

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If a division manager’s compensation is based upon the division’s net income, the manager may decide to meet the net income targets by increasing production when using absorption costing, in order to increase net income An unrealistic budget is more likely to result when it has been developed in a top down fashion A major element in budgetary control is the comparison of actual results with planned objectives The purpose of the sales budget report is to determine whether sales goals are being met The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called responsibility accounting Variance reports are internal reports for management
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Internal reports that review the actual impact of decisions are prepared by management accountants The process of evaluating financial data that change under alternative courses of action is called incremental analysis Baden Company manufactures a product with a unit variable cost of $100 and a unit sales price of $176.
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