Which of the Following Is an Advantage of Using Practical

question 66

Multiple Choice

Which of the following is an advantage of using practical capacity to allocate costs?

• A) is that it allows a downward supply spiral to develop
• B) is that it focuses management's attention on managing unused capacity
• C) is that budgets are much easier to develop
• D) is that it results in departments bearing a lower percentage of fixed costs

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of direct materials used in production and the standard quantity expected, valued at the standard cost.