Master-Budget Capacity Utilization

question 37

Multiple Choice

Master-budget capacity utilization:

• A)hides the amount of unused capacity
• B)represents the maximum units of production intended 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

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Definitions:

Unconscionable

Actions or conditions that are shockingly unfair or unjust; often referring to terms in contracts that are so one-sided that they are oppressive or unfairly penalize one party.

Privity of Contract

A legal concept that restricts the rights or duties arising under a contract to the parties who agreed to it.

Contractual Relation

A legally binding agreement between two or more parties that outlines the rights and duties of each party.

Tacit Agreement

An understanding or agreement that is implied from actions or circumstances, not explicitly stated.