5.The extent to which an organization uses fixed costs in its cost structure is measured by financial leverage.
6.Fixed manufacturing overhead is not inventoried under absorption costing.
7.Variable manufacturing overhead becomes part of a unit's cost when variable costing is used.
8.Absorption costing is required for tax purposes.
9.When units sold exceed units produced, absorption-costing income will be lower than variable-costing income.
10. For external-reporting purposes, generally accepted accounting principles require that netincome be based on variable costing.
11. The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as the financial budget.
12. A company's sales forecast would likely not consider general economic and industry trends.
13. Sainte Claire Corporation has a highly automated production facility. Production volume and management judgment are the two factors that would likely have the most direct influence on the company's manufacturing overhead budget.