Question

Write down the budget format (functional, flexible, program, or responsibility center) that matches each description:

a. Shows the profitability of the organization's major activities;

b. Shows the expenses incurred by specific managerial units;

c. Shows how profits change with production volume; d. Separates program expenses from administrative expenses.

Answer 1

Particulars	Budget	Explanation
a. Shows the profitability of the organization's major activities;	Responsibility center	It shows profitability of each center and hence indicate areas of improvement
b. Shows the expenses incurred by specific managerial units	Functional Budget	Functional budget doest not mean that budget works automatically but it apllies to specific function. It may be temporarly or permenant
c. Shows how profits change with production volume	Flexible Budget	Unlike Static budget, flexible budget changes with volume as variable cost per unit is assigned hence if volume is increased than sales amount variable cost will also change and hence profit with respect of that level of production can be known
d.Separates program expenses from administrative expenses	Program Budget	This budget includes only revenue and expense of particular program