Which of the Following Budgets Usually Shows Separate Sections for Fixed

question 44

Multiple Choice

Which of the following budgets usually shows separate sections for fixed and variable costs?

• A)Direct materials and manufacturing overhead budget
• B)Manufacturing overhead budget and production budget
• C)Production budget and manufacturing overhead budget
• D)Operating expense budget and manufacturing overhead budget

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Definitions:

Variable Cost

A cost that varies directly with the level of production or sales volume.

High-low Method

A method applied in cost accounting that calculates fixed and variable expenses by analyzing the maximum and minimum activity levels.

Variable Component

The portion of cost or expense that varies directly with changes in output or activity level.

Pre-tax Income

Pre-tax Income is the amount of income earned by a business before any taxes have been deducted.