Master-Budget Capacity Utilization

question 14

Multiple Choice

Master-budget capacity utilization

• A)hides the amount of unused capacity.
• B)represents the maximum units of production for current capacity.
• C)provides the best cost estimate for benchmarking purposes.
• D)when used for product costing results in the lowest cost estimate of the four capacity options.
• E)represents the long-term utilization expected to meet customer demand.

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Definitions:

Middle Class

A social group between the upper and working classes, including professionals and businesspeople, characterized by moderate to comfortable economic security.

Par Value

The face or nominal value of a bond, stock share, or coupon, as declared by the issuer.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and dividend eligibility.

Paid-in Capital

Funds received by a company from selling its stock directly to investors, not including any stock sales on the open market.