For Activity Flexible Budgeting, a Cost Formula Is Developed for Each

question 34

Multiple Choice

For activity flexible budgeting, a cost formula is developed for each

• A) overhead item as a function of direct labor hours.
• B) activity as a function of activity drivers.
• C) activity as a function of resource drivers.
• D) overhead item as a function of resource drivers.
• E) each activity as a function of direct labor hours.

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Definitions:

Processing Float

The time difference between when a payment is made and the funds are actually available in the payee's account.

Credit Policy

Guidelines that govern a company's extension of credit to customers, determining who is eligible and on what terms.

Credit Sales

Sales made by a business on credit, allowing customers to pay at a later date.

Receivables

Money owed to a company by its customers for goods or services that have been delivered or sold but not yet paid for.