Change in Net Working Capital Associated with New Projects Is

question 34

True/False

change in net working capital associated with new projects is always positive, because new projects mean that more working capital will be required This situation is especially true for replacement projects.

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Definitions:

Predetermined Fixed Manufacturing Overhead Rate

A rate used to allocate fixed manufacturing overhead to products based on a predetermined activity level.

Fixed Manufacturing Overhead Budget Variance

The difference between the actual fixed manufacturing overhead costs and the budgeted fixed overhead costs.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred during production and the standard cost of variable overhead allocated for the actual production volume.

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to the variance in the volume of production.