If the Organization Is Making Good Progress Toward Achieving an Ideal

question 56

Multiple Choice

If the organization is making good progress toward achieving an ideal standard, its management may not need to:

• A) Modify its standards.
• B) Curtail spending on variable costs.
• C) Curtail spending on fixed costs.
• D) Review and revise the management accounting system.
• E) Take any corrective action when variances are reported.

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Definitions:

Useful Life

The estimated period over which it is expected that an asset will be profitable or useful to its owner.

Units-Of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on its actual usage or activity level.

Factory Machinery

Refers to the physical equipment used in the production process within a manufacturing facility.

Delivery Equipment

Assets such as trucks and vans that are used by a business to transport products to customers.