Short-Term Schedules Are Prepared

question 34

Multiple Choice

Short-term schedules are prepared:

• A) directly from the aggregate plans.
• B) directly from the capacity plans.
• C) from inventory records for items that have been used up.
• D) from master schedules, which are derived from aggregate plans.
• E) from the purchasing plans.

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Definitions:

Common Fixed Expenses

Expenses that do not vary with the level of production or sales and are typically required to run a business, such as rent, salaries, and insurance.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold, treating fixed manufacturing overhead as a period cost.

Fixed Manufacturing Overhead

The manufacturing costs that do not change with the level of production, such as rent, salaries, and insurance.

Divisional Segment Margin

The amount of profit generated by each division or segment of a business, crucial for evaluating the financial health of distinct parts of a company.