Interest Expense Is Not Included in the Selling and Administrative

question 68

True/False

Interest expense is not included in the selling and administrative budget because a company cannot estimate interest expense until it prepares the cash budget and makes borrowing projections.

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Definitions:

Discontinue

To discontinue means to stop producing, selling, or providing a product or service, often permanently.

Activity-Based Costing

A costing methodology that assigns costs to products or services based on the resources they consume.

Traditional Systems

often refer to conventional or established procedures, techniques, or technologies that have been used over time, typically before newer alternatives.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating the ability to cover fixed costs.