Question

1) An equipment's book value is the original cost plus accumulated depreciation.

A) TRUE
B) FALSE

2) The contribution margin per unit of a given product guides managers when deciding which product to emphasize in a sales mix.
A) TRUE
B) FALSE

3) Budgetary slack helps buffer managers from budget cuts imposed by higher-level management.

A) TRUE
B) FALSE

4) The direct materials price variance is based on the standard quantity of inputs allowed for the actual output.

A) TRUE
B) FALSE

Answer 1

1) False

Book value of asset = Cost of asset - Accumulated Depreciation

2) True

Contribution margin per unit helps in emphasising sales mix for managers

3) True

Budgetary slack helps managers from budget cuts from top management as they tend to overestimate expenses and underestimate revenues

4) Fasle

Materials Price Variance dels with standard price of input for actual output