Which of the Following Statements Is Incorrect

question 61

Multiple Choice

Which of the following statements is incorrect?

• A) A continuous twelve-month budget results from dropping the month just ended and adding a future month.
• B) The production budget is derived from the direct materials and direct labor budgets.
• C) The cash budget shows anticipated cash flows.
• D) In the budget process for not-for-profit organizations the emphasis is on cash flow rather than on revenue and expenses.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used as a benchmark to measure performance and cost control.

Clerical Costs

Expenses related to the administrative functions of an office, including salaries of office staff, stationery, and office supplies.

Standard Costs

Estimated or predetermined costs of manufacturing, selling, and administering a product or service.

Expected Future Costs

Projected expenses that a company anticipates incurring in the pursuit of its future activities.