Charles Mann, the Manager of Sparkle Toothpaste, Is Estimating How

question 32

Multiple Choice

Charles Mann, the manager of Sparkle Toothpaste, is estimating how many units of toothpaste his firm will be able to sell to young males in the 18-24 age group in his county. In short, he is

• A) preparing a revenue report.
• B) making a sales forecast.
• C) determining the market potential.
• D) estimating customer loyalty.
• E) determining the sales budget.

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Definitions:

Overhead Volume Variance

The difference between the budgeted overhead costs and the actual costs incurred, due to changes in the level of production or activity.

Fixed Overhead

Fixed Overhead refers to the indirect costs of production that do not vary with the volume of production, such as salaries of managers, rent of factory, and depreciation of equipment.

Standard Cost System

A system of accounting that uses predetermined costs for calculating variances and tracking operational performance.

Job Order Cost System

A cost accounting system in which costs are assigned to each job or batch.