Grist Enterprises Is Converting to an Activity-Based Costing System It

question 62

Multiple Choice

Grist Enterprises is converting to an activity-based costing system It wishes to depict the various activities in its manufacturing process along with the activities' relationships. Which of the following is a tool that the company can use to accomplish this task?

• A) Storyboards.
• B) Activity relationship charts (ARCs).
• C) Decision trees.
• D) Simulation games.
• E) Process organizers.

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Definitions:

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.

Favorable Variances

Differences between actual and budgeted or standard costs that result in better-than-expected financial performance.

Unfavorable Variances

Differences where actual costs are higher than standard or expected costs in budgeting.

Cost Variance

The difference between the estimated cost of a project or production and the actual cost incurred.