Since Budgeting Is a Financial Function and Mostly an Analytical

question 17

True/False

Since budgeting is a financial function and mostly an analytical and quantitative exercise, it generally has no impact on human behavior, motivation and decision making.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated overhead costs and activity levels, used to allocate overhead costs to products.

Direct Materials Cost

The cost of raw materials that are directly used in the production of goods, which is easily traceable to the finished product.

Direct Labor Wage Rate

The hourly wage rate paid to workers directly involved in the production of goods or services.

Predetermined Overhead Rate

A calculated rate used to assign overhead costs to products or services, based on estimated overhead and estimated activity base.