When Large Differences Exist Between Practical Capacity and Master-Budget Capacity

question 163

Multiple Choice

When large differences exist between practical capacity and master-budget capacity utilization, companies may:

• A)classify the difference as planned unused capacity
• B)use master-budget capacity utilization for setting selling prices
• C)use practical capacity for meaningful feedback to the marketing manager
• D)All of these answers are correct.

---

Definitions:

Land Account Transaction

An accounting entry that affects the balance of the land account, recording the acquisition, improvement, or disposal of land.

Tax Purposes

For Tax Purposes means considerations related to calculating tax liabilities and filing tax returns as required by law.