________ Bases a Period's Expenditure Level for a Discretionary Item

question 58

Multiple Choice

________ bases a period's expenditure level for a discretionary item on the amount spent on that item during the previous period.

• A)Zero-based budgeting
• B)Periodic budgeting
• C)Incremental budgeting
• D)Continuous budgeting

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Definitions:

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure actual performance against.

Budgeted Overhead

The projected or estimated indirect costs related to the operation of a business, which could include utilities, rent, and salaries.

Activity Total

The composite or sum total of costs associated with a specific activity or operation within a business.

Standard Costing

A cost accounting method that uses standard costs for direct materials, direct labor, and manufacturing overhead to measure performance.