NOTE: ONLY ANSWER ODD OR EVEN NUMBER TRUE OR FALSE QUESTIONS. 1 Absorption costing is used for internal use in decision making and is sometimes called direct costing Variable costing is required under generally accepted accounting principles. 2. 3 Manufacturing margin is the excess of variable selling and administrative expenses over sales. 4. 5. 6. Under Absorption and Variable costing, some of the decision maging situations could include the controlling of cost, price products and production plarining. For planning and control purposes, managers often compare planned with actual contribution margins. All cost are controllable by someone within a business, but some costs may not be controllable at certain levels of management Market analysis determines the profit contributed by the market segments of a company and can be analyzed using sales, cost and expenses. In the long run, planning production is limited to existing capacity, but in the short run, planning production may include expanding existing capacity In analyzing market segments, all companies prepare variable costing reports. Contribution margin analysis explains the difference between actual and planned data. 7. CO 9. 10. 11. Budgets have an important role for organizations of all sizes and affects managerial functions like planning, directing and controlling 12 13. Setting budgeted goals too loose are very hard or impossible to achieve. A continuous budgeting process is a variation of fiscal year budgeting that is used to maintain a 12 month projection into the future. 14. A zero based budget shows the expected results for only one activity level. > Sheet1 Sheet2 Sheet3 + 14. 15. A zero based budget shows the expected results for only one activity level. A static budget requires managers to estimate sales, production, and other operating data as though operations are being started for the first time. 16. Flexible budgets are similar to zero based budgets which show expected results of a business for each new year. PAGE 1 OF 6