Multiple Choice 1. In·flexible budget, what will happen to fued costs as the act
ID: 2572010 • Letter: M
Question
Multiple Choice 1. In·flexible budget, what will happen to fued costs as the activity levee increases? A) The fixed cost per unit will decrease. B) The fixed cost per unit will remain unchanged. C) The fixed cost per unit will increase. D) Fixed costs are not included in a flexible budget 2. When using a flexible budget, a decrease in activity within the relevant range A) decreases variable cost per unit B) increases variable cost per unit C) decreases total costs D) increases total costs. 3. A budget that is based on the actual activity of a period is known as a A) continuous budget B) flexible budget C) static budget D) master budget 4. Which of the following may appear on a flexible budget performance report? A) An unfavorable activity variance B) A favorable revenue variance. C) An unfavorable spending variance. D) All of the above may appear on a flexible budget performance report 5. Sathre Corporation is an oil well service company that measures its output by the number of wells serviced The company has provided the following foxed and variable cost estimates that it uses for budgeting purposes Variable Fibxed Element Element per per Month Well Serviced $4,500 $900 Revenue Employee salaries and wages.. Servicing materials $56,400 $700 $35,400 When the company prepared its planning budget at the beginning of December, it assumed that 34 wells would have been serviced. However, 32 wells were actually serviced during December The 'Employee salaries and wages in the flexible budget for December would have been closest to A) $87,000 B) $84,600 C) $85,200 D) $89,888Explanation / Answer
1. Correct option is:
Fixed cost per unit decreases
Explanation:
When the activity level increases, the more units are produced , total fixed cost remains the same , so per unit fixed cost decreases as the activity level increases.
2. Decreases total cost
3. Flexible budget
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