Quiz — Version C Last Name__Ts mant 1) The budgeted fixed manufacturing cost rate is the lowest for : A) practical capacity @ theoretical capacity C) master-budget capacity utilization D) normal capacity utilization 2) Which of the following is true of theoretical capacity? A) It will be less than the real capacity available to a company. B) It provides the best perspective of actual long-run costs. It results in the lowest cost estimate Of the four capacity options when used for product costing. D) It replicates the cost of capacity in a competitor's cost structure. 3) The use of theoretical capacity results in an unrealistically low fixed manufacturing cost per unit because it is based on . A) real available capacity ©) an unattainable level of capacity C) normal capacity utilization D) normal costing 4) The effect of spreading fixed manufacturing costs over a shrinking master-budget capacity utilization amount results in . A) greater utilization of capacity @ increased unit costs C) more competitive selling prices D) greater demand for the product 5) The higher the denominator level, the ® higher the budgeted fixed manufacturing cost rate B) lower the amount of fixed manufacturing costs allocated to each unit produced C) higher the favorable production- volume variance D) more likely actual output will exceed the denominator level First Name Abaian +6) Practical capacity is the denom level concept that . reduces theoretical capacity for Tnavoidable operating interruptions B) is the maximum level of operations at maximum efficiency C) is based on the level of capacity utilization that satisfies average customer demand over periods generally longer than one year D) is based on anticipated levels of capacity utilization for the coming budget period 7 reduces theoretical capacity for unavoidable operating interruptions @ Practical capacity B) Theoretical capacity C) Master-budget capacity utilization D) Normal capacity utilization 8) is based on the level of capacity utilization that satisfies average customer demand over period: generally longer than one year. A) Practical capacity B) Theoretical capacity C) Master-budget capacity utilization @)Normal capacity utilization 9) is the level of capacity utilization that managers expect for the current budget period, which is typically one year. A) Practical capacity Master-budget capacity utilization ') Theoretical capacity D) Normal capacity utilization 10) is the level of capacity based on producing at full efficiency all the time. A) Practical capacity Q Theoretical capacity C) Normal capacity D) Demand capacity