18) Peanut butter costing involves assigning costs in a non uniform manner to reflect the different utilization of resources by different products or services.

TRUE FALSE

19) Using a broad average to assign costs to products or services may lead to undercosting or overcosting.

TRUE FALSE

20) A top-selling product might actually result in recorded losses for the company.

TRUE FALSE

21) A budget is a quantitative expression for a set time period of a proposed future plan of action by management.

TRUE FALSE

22) The master budgetsummarizes all the financial and nonfinancial plans into a single document.

TRUE FALSE

23) The master budget embraces the impact of both operating decisions and financing decisions as related to acquisitions and uses of scarce resources.

TRUE FALSE

24) A variance is the difference between the actual result and a budgeted amount.

TRUE FALSE

25) Variances and flexible budgets help managers gain insights into why actual results differ from planned performance.

TRUE FALSE

26) A static budget is a budget that can be changed or altered after it is developed.

TRUE FALSE

27) Capacity refers to the quantity of outputs that can be produced from long-term resources available to the company.

TRUE FALSE

28) Capacity cost is a variable overhead cost.

TRUE FALSE

29) Fixed overhead costs are a lump sum that does not change in total despite changes in the cost driver.

TRUE FALSE

30) Determining the "right" level of capacity is an important strategic decision.

TRUE FALSE

31) Both theoretical and practical capacity measure capacity in terms of demand for the output.

TRUE FALSE

32) Normal capacity utilization is the expected level of capacity utilization for the current budget period, which is typically one year.

TRUE FALSE

33) A linear cost function is a function in which the graph of total costs versus a single cost driver forms a straight line, within the relevant range.

TRUE FALSE

34) When estimating linear cost functions, it is assumed that variations in total cost of a cost object cannot be explained by variations in a single cost driver.

TRUE FALSE

35) A mixed cost has a fixed element.

TRUE FALSE

36) A decision modelis a formal method of making a choice that uses only quantitative analyses.

TRUE FALSE

37) The purpose of evaluating performance in the decision process is to provide feedback.

TRUE FALSE

38) Anticipated future costs that differ with alternative courses of action are known as relevant costs.

TRUE FALSE

39) The total cost difference between two separate alternatives in a decision-making process is the net relevant cost.

TRUE FALSE

40) Each item included in the relevant-cost analysis should differ according to the alternative being considered and be an expected future revenue or cost.

TRUE FALSE