Which of the Following Statements Concerning the Cash Budget Is

question 23

Multiple Choice

Which of the following statements concerning the cash budget is correct?

• A) Depreciation expense is not explicitly included, but depreciation effects are implicitly included in estimated tax payments.
• B) Cash budgets do not include financial expenses such as interest and dividend payments.
• C) Cash budgets do not include cash inflows from long-term sources such as bond issues.
• D) Statements a and b are correct.
• E) Statements a and c are correct.

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Definitions:

Standard Cost System

A cost accounting system that uses cost units determined in advance for materials, labor, and overhead to estimate the cost of production.

Fixed Manufacturing Overhead

Regular, consistent expenses related to manufacturing that do not vary with the level of production, such as rent, salaries, and insurance.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead cost incurred and the expected (or standard) variable overhead cost for the actual production volume.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor.