Which of the following is true of master-budget capacity utilization?
A) It hides the amount of unused capacity.
B) It represents the maximum units of production intended for current capacity.
C) It provides the best cost estimate for benchmarking purposes.
D) It is an average that provides no meaningful feedback to a firm's marketing manager for a particular year.
Answer: A
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Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:
Materials:(4.0 kilograms × $10.00 per kilogram)$40.00 Labor:(4.0 hours × $18.00 per hour)$72.00 All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July: In-process beginning inventory none In-process ending inventory—90% complete as to labor 1,000unitsUnits completed during the month 7,200unitsBudgeted output 8,000unitsPurchases of materials, in kilograms (AQ) 30,000 Total actual labor costs incurred$525,000 Direct labor hours worked (AQ) 28,000hoursMaterials purchase-price variance$3,000unfavorableIncrease in materials inventory in July 1,500kilogramsBeginning inventory of materials 0kg. The sales volume variance, measured in terms of direct labor cost, for July (to the nearest dollar) was:
Computer security is protection of the integrity, availability, and confidentiality of information system resources
Indicate whether the statement is true or false.