When a Manager Is Evaluated on the Difference Between Sales

question 73

Multiple Choice

When a manager is evaluated on the difference between sales revenue and the budgeted cost of making those goods and services, this is an example of a(n) ________ budget approach.

• A)revenue
• B)cash flow
• C)expense
• D)profit

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Definitions:

Customizing

The process of modifying products or services to meet specific customer demands or preferences.

Manufacturing Cost

The total expense incurred in the production of goods, including raw materials, labor, and overhead.

Predetermined Overhead Rates

Estimated overhead rates used to assign manufacturing overhead costs to products based on a pre-defined basis such as machine hours or labor hours.

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating overhead costs in manufacturing.