Solved

Match Each Term or Concept with the Definition or Explanation

Question 158

Matching

Match each term or concept with the definition or explanation. Each numbered item has only one correct answer, and each lettered item may be used only once.

Premises:
Denominator motivation for normal costing
Absorption costing
Volume variance
Theoretical capacity
Information timeliness motivation for normal costing
Numerator motivation for normal costing
Variable costing
Practical capacity
Expected capacity
Throughput costing
Responses:
Maximum volume of goods an organization can hypothetically produce
Upper limit takes into account Regular production schedules
Includes contribution margin on the income statement
Actual fixed overhead costs are not known during the period
Closed to cost of goods sold if immaterial
Modified form of variable costing that treats direct labour as a period expense
Conforms to generally accepted accounting principles
Fixed production overhead costs vary over time
Actual production volumes fluctuate
Also known as budgeted capacity

Correct Answer:

Denominator motivation for normal costing
Absorption costing
Volume variance
Theoretical capacity
Information timeliness motivation for normal costing
Numerator motivation for normal costing
Variable costing
Practical capacity
Expected capacity
Throughput costing
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