The Chief Executive Officer Told Nick, the Production Manager at BRS

question 28

Multiple Choice

The chief executive officer told Nick, the production manager at BRS Ltd, to reduce costs and increase profits. In response, Nick decided to produce more units for inventory. BRS is most likely using

• A) Variable costing.
• B) Throughput costing.
• C) Absorption costing.
• D) Capacity-based costing.

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Definitions:

Activity Variance

The difference between the budgeted amount of activity (like hours or units) and the actual amount achieved.

Budgeting

The process of creating a plan to spend your money, allowing for the allocation of funds to various areas.

Actual Results

The real financial outcomes achieved by a business over a period, which can be compared against budgeted or forecasted figures for analysis.

Personnel Expenses

Personnel expenses are costs associated with employing staff, including wages, benefits, and taxes.