Management Accounting Information Is Important for Both For-Profit and Not-For-Profit

question 38

True/False

Management accounting information is important for both for-profit and not-for-profit organizations.

---

Definitions:

Factory Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and salaries of non-direct labor, which are not directly attributed to the production of goods.

Variable Factory Overhead

Costs in the manufacturing process that fluctuate with production volume, such as materials and labor directly involved in production.

Controllable Variance

The difference between actual costs and budgeted costs that a manager has direct control over in a given period.

Favorable Volume Variances

Differences between the expected volume of production or sales and the actual volume that lead to lower costs or higher profits than planned.