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:

Retained Earnings

Retained earnings are the portion of a company's profits that are kept or retained within the company for reinvestment in business operations, rather than being paid out as dividends to shareholders.

Retained Earnings

The portion of a company’s profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment.

Cumulative Net Income

The total amount of net income earned by a company over a specified period, typically since its inception.

Dividends Declared

The announcement by a company's board of directors of the issuance of dividends to shareholders.