Which of the Following Statements Is Correct

question 63

Multiple Choice

Which of the following statements is correct?

• A)The sales forecast is the driver for corporate financial planning.
• B)The addition to retained earnings is the driver for corporate financial planning.
• C)The debt ratio is the driver for corporate financial planning.
• D)None of these statements are correct.

---

Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins by dividing estimated manufacturing overhead costs by an allocated base, used to apply overhead costs to products.

Fixed Overhead

Costs that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance.

Work in Process

Items or materials that are partially completed in the manufacturing process, situated between raw materials and finished goods.

Finished Goods

Goods that are available for sale after completing the production process.