Which Statement Is True About the Activity Index Used in Preparing

question 98

Multiple Choice

Which statement is true about the activity index used in preparing the flexible budget?

• A)It applies only to fixed manufacturing costs.
• B)It is the same for all departments of the company.
• C)It significantly influences the variable costs that are being budgeted.
• D)It is irrelevant to total costs.

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Definitions:

Automobile Manufacturers

Companies engaged in the design, production, marketing, and selling of motor vehicles.

Environmental Impact Statements

Documents required by law for certain projects that explain their potential environmental effects and propose mitigation strategies.

Clean Water Act

United States federal law aimed at reducing pollution and protecting the quality of the nation's waters.

Discharge Permit

Authorization granted by a regulatory body allowing the release of certain pollutants into the environment under specified conditions.