The Budget for a Given Cost During a Given Period

question 2

Multiple Choice

The budget for a given cost during a given period was $80,000. The actual cost for the period was $72,000. Considering these facts, the plant manager has done a better-than-expected job in controlling the cost if: (CPA adapted)

• A) the cost is variable and actual production was 90% of budgeted production.
• B) the cost is variable and actual production equals budgeted production.
• C) the cost is variable and actual production was 80% of budgeted production.
• D) the cost is a discretionary fixed cost and actual production equals budgeted production.

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Definitions:

Liabilities

Financial obligations or debts that a company or individual owes, which are recorded on the right side of the balance sheet.

Mortgages

A type of loan specifically used for the purchase of real estate, where the property itself serves as collateral against the borrowed funds.

Consumer Credit

A form of credit extended to consumers to finance the purchase of goods or services, often associated with personal loans, credit cards, and lines of credit.

Productive Capacity

The maximum output a business, industry, or economy can produce using all available resources efficiently.