Multiple Choice
Which of the following is the most appropriate allocation base for assigning factory rent (an indirect expense) to products in a manufacturing company?
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1. Introduction to Accounting
Types of Accounting
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Which of the following may appear on a flexible budget performance report?
A
List of all company shareholders
B
Variance between actual and budgeted costs
C
Historical cost of fixed assets
D
Depreciation schedules for tax purposes
Verified step by step guidance1
Understand the purpose of a flexible budget performance report: It is used to compare actual performance with budgeted performance, adjusting for changes in activity levels.
Identify the key components of a flexible budget performance report: These typically include actual costs, budgeted costs (adjusted for actual activity levels), and the variance between the two.
Analyze the options provided in the question: Determine which of the options aligns with the purpose of a flexible budget performance report.
Recognize that the variance between actual and budgeted costs is a critical element of a flexible budget performance report, as it highlights areas where performance deviates from expectations.
Conclude that the other options (list of shareholders, historical cost of fixed assets, and depreciation schedules for tax purposes) are unrelated to the purpose of a flexible budget performance report and would not appear on it.
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