The recalculation of demand can be avoided, by using practical capacity while calculation of budgeted fixed manufacturing per unit cost as ___________?
Correct answer: A. denominator
- A. denominator
- B. numerator
- C. multiplier
- D. equalizer
Explanation
Practical capacity is used as the denominator when calculating budgeted fixed manufacturing cost per unit. Using a stable capacity denominator avoids recalculating the unit cost whenever expected demand changes.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
If the budgeted fixed manufacturing cost is $124000 and the per unit cost is $124, then budgeted production units can be ___________?
Another name of super-variable costing is ___________?
The revenue and throughput contribution is subtracted to calculate the __________?
If the direct material cost of goods sold is $7500, and through contribution is $15650, then revenues will be _________?
The budgeted fixed manufacturing cost is divided by budgeted fixed manufacturing cost per unit to calculate : __________?
The managers using capacity planning do not make ___________