If Machine Maintenance Is Scheduled at a Time When Production

question 53

Multiple Choice

If machine maintenance is scheduled at a time when production is at a low level, then ________.

• A) low production is the cost driver of high repair costs
• B) an understanding of operations is needed to determine an appropriate cost driver
• C) low production should be avoided since it is the cause of machine maintenance
• D) machine maintenance cannot be accurately predicted

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred, ensuring the accounts reflect these adjustments before financial statements are prepared.

Asset Balances

The value of different types of assets that a company owns, as recorded in the balance sheet at a particular point in time.

Liability Balances

The amount of money a company owes to creditors or other parties, reflected in its balance sheet.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used for preparing financial statements.