Fund Balance May Be Assigned When

question 15

Multiple Choice

Fund balance may be assigned when

• A) Management determines that a portion of unassigned fund balance should be set aside for the construction of a new fire station.
• B) The city council passes an ordinance to set aside a portion of unassigned fund balance for construction of a new fire station.
• C) Management believes that a portion of restricted fund balance should be set aside for the construction of a new fire station.
• D) Management determines it needs a predetermined amount of materials and supplies inventory at the end of each year.

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Definitions:

Overhead

The ongoing expenses of operating a business that are not directly associated with the production of goods or services.

Fixed Manufacturing Overhead

Costs that remain constant regardless of the level of production, related specifically to the manufacturing process, such as rent, utilities, and salaries of permanent staff.

Machine-Hours

A measure of machine usage, representing the total hours a machine operates during a specific period.

Volume Variance

The difference between the expected (budgeted) volume of production or sales and the actual volume, affecting costs and revenues.