In order for a department to be both a cost center and a revenue center it must:

In order for a department to be both a cost center and a revenue center it must:
a. generate some income.
b. have income that exceeds operating costs.
c. profit.
d. break even.

Q. 2

Which of the following is NOT considered to be a cost center?
a. payroll
b. material management
c. human resources
d. the financial department

Q. 3

When preparing a budget, projected revenues may include all of the following EXCEPT:
a. income from grants or subsidies.
b. volume of work to be done.
c. estimated labor needs.
d. the price of the product.

Q. 4

The preparation of an operating budget is generally directed by the:
a. payroll department.
b. financial department.
c. budgeting team.
d. general manager.

Q. 5

Which of the following is NOT true regarding variable budgets?
a. Variable budgets are designed to be flexible.
b. Variable budgets address the shortcomings of fixed budgets.
c. The expense portion of the operating budget is dependent on the revenue portion of that budget.
d. This type of budgeting is based on predictions rather than reactions.

Q. 6

A newer budgeting concept that can be applied to either the incremental or zero-base budget is called the:
a. static budget.
b. variable budget.
c. fixed budget.
d. flexible budget.

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In order for a department to be both a cost center and a revenue center it must:

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