US CMA Part 1 · Chapter 2 · Question 23 of 30
A construction company has won a three-year contract to build a hospital. Which type of budget is most appropriate for planning and controlling the costs of this contract?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) A project budget covering the entire life of the contract
Explanation
A project budget is prepared for a specific, one-off undertaking and spans the full life of the project, which may cross several fiscal years. The annual master budget covers the whole company for a single year and does not isolate the project.
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