Which of the Statements Below Is TRUE

question 99

Multiple Choice

Which of the statements below is TRUE?

• A)Cash collections are closely tied to the sales forecast as the sales forecasts are typically used for scheduling production.
• B)Financing costs include the wages paid to workers,the raw materials for manufacturing products,the overhead (such as electricity,water,plant space,and so on),and the shipping costs that get the product to the customer.
• C)Once all the expenditures and receipts are determined,a financial manager can determine the exact cash excess or cash shortfall in upcoming periods.
• D)It is the timing and the amount of cash outflow from production that is important to the financial manager and estimating this amount is part of the cash forecasting process.

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Definitions:

Overhead Volume Variance

The difference between allocated overhead based on standard hours allowed and the actual overhead incurred, reflecting efficiency in utilizing resources.

Normal Capacity Hours

A calculation of the maximum amount of work that an organization can complete in a given period under normal conditions.

Standard Hours Allowed

The estimated amount of time that should be required to complete a specific amount of work under normal conditions.

Overhead Volume Variance

The difference between the budgeted and actual overhead costs attributable to a change in production volume.