A CVP income statement.

A CVP income statement is frequently prepared for internal use by management. Describe the features of the CVP income statement that make it more useful for management decision-making than the traditional income statement that is prepared for external users.

S-A E 208

(a) Matt Sampson asks your help in understanding the term “activity index.” Explain the meaning and importance of this term for Matt.

(b) State the two ways that variable costs may be defined.

S-A E 209

(a) What is a budget?

(b) How does a budget contribute to good management?

S-A E 210

Budgeting can be an important management tool if implemented properly. Identify several positive results when budgets are used properly. Since budgets affect people, identify several negative aspects if budgets are not implemented properly.

S-A E 212

What is participative budgeting? What are its potential benefits? What are its potential shortcomings?

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