When a Flexible Budget Is Used, a Decrease in the Actual

question 65

Multiple Choice

When a flexible budget is used, a decrease in the actual production level within a range of activity would

• A) decrease variable cost per unit.
• B) decrease total variable costs.
• C) increase variable cost per unit.
• D) decrease fixed cost per unit.

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Definitions:

Total Assets

The aggregate of all assets owned by a business, evaluated at cost or market value on the balance sheet.

Adjusted Trial Balance

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

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, which are expensed over the period the insurance coverage relates to.

Current Asset

Asset expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle.