Which of the Following Is Not Considered a Commitment

question 52

Multiple Choice

Which of the following is not considered a commitment?

• A) agreements to purchase raw materials
• B) pension plans
• C) agreements to lease facilities at set prices
• D) Each of the above is a commitment.

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Definitions:

Budgeted Cash Receipts

Projected cash inflows for a future period, based on sales forecasts and other receipts.

Budgeted Cash Disbursements

An estimate of all cash payments that a business plans to make over a specific period, including operating expenses, purchase of assets, and other payouts.

Variable Selling Expense

includes costs that vary directly with sales volume, such as commissions, shipping charges, and promotional expenses.

Direct Labor Wage Rate

The amount paid per hour or per unit of production to employees who directly manufacture or assemble products.