Answer the Following Question(s)using the Information Below

question 133

Multiple Choice

Answer the following question(s) using the information below.Heinrich Corporation budgeted fixed manufacturing costs of $6,000 during 2012.Other information for 2012 includes:
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
-Which of the following is an example of a drawback of using absorption costing?

• A)It allows management the ability to manipulate operating income via production schedules.
• B)An inventoried cost will eventually become part of cost of goods sold.
• C)The company's sales level drives the production schedules.
• D)A manager may increase maintenance activities above the budgeted level for the current period.
• E)Expensing fixed costs as period costs reducing operating income.

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Definitions:

Coelomic Cavity

The Coelomic Cavity is a fluid-filled body cavity within organisms that is lined by a tissue derived from mesoderm, providing space for the internal organs and allowing them to move independently.

Cloacal

Relating to the cloaca, a common cavity at the end of the digestive tract for the release of both excretory and genital products in vertebrates such as birds, reptiles, amphibians, and some fish.

Early Digestive Tract

Refers to the initial sections of the digestive system where the breakdown of food begins, including the mouth, esophagus, and stomach.

Evaginations

The process of forming an outpouching or protrusion of a structure or tissue.