Grayson Enterprises manufactures springs and shock absorbers. Springs account for 40% of the company's total sales revenue, whereas shocks account for about 60%. The contribution margin ratios for springs and shocks are 45% and 35%, respectively. Grayson's fixed costs average $450,000 per month. Grayson's monthly break-even point expressed in sales dollars is: ( )
A. $1,000,000.
B. $1,285,714.
C. $1,153,846.
D. $2,285,714
A budget that can be adjusted easily to show budgeted revenues, costs, and cash flows at different levels of activity is known as( )
A flexible budget.
B. A master budget.
C. A production budget.
D. A multi-level budget.
When budgeted amounts are set at reasonable and achievable levels: ( )
A. They reflect a "total quality management" philosophy of management.
B. A highly efficient department should fall slightly short of budget standards.
C. Meeting the budgeted amounts ensures a maximum level of profitability.
D. Failure to stay within the budget is viewed as an unacceptable level of performance.
The benefits of budgeting include all of the following except: ( )
A. Enabling the company to produce more for less cost.
B. Assigning responsibility for situations that require corrective action.
Coordinating activities between departments within the organization.
D. Creating standards for evaluating performance.