The machine budgeted time standards are set too tight, is the possible cause for ____________?
Correct answer: B. exceeding budget
- A. priced budget
- B. exceeding budget
- C. fixed budget
- D. variable budget
Explanation
An excessively tight machine-time standard allows too little time for the work, so actual machine time can exceed the budgeted standard. This produces an exceeding-budget situation rather than a type of budget.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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