If the Master Budget Prepared at a Volume Level of 20,000

question 82

True/False

If the master budget prepared at a volume level of 20,000 units includes direct materials of $80,000, a flexible budget based on a volume of 18,000 units would include direct materials of $72,000.

---

Definitions:

Average Product

The output per unit of input, such as the quantity of goods produced per worker.

Law Of Diminishing Returns

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.

Resource Inputs

The basic materials and components required in the production process to create goods or services.

Product Outputs

Product outputs refer to the goods or services produced as a result of manufacturing processes or business activities.