Author Question: For financial reporting, SFAS 151 requires: (Read 32 times)

clippers! · **on:** Mar 6, 2021

Question 1

Customers expect to pay a price that includes ________.
◦ the cost of unused capacity
◦ only the cost of actual capacity used
◦ variable costs but not capacity costs
◦ the cost of direct materials, direct labor, and fixed overhead

Question 2

For financial reporting, SFAS 151 requires:
◦ the allocation of fixed manufacturing overhead to production must be based on theoretical capacity of the facilities
◦ the allocation of fixed manufacturing overhead to production must be based on normal capacity of the facilities
◦ the allocation of fixed manufacturing overhead to production must be based on practical capacity of the facilities
◦ the allocation of fixed manufacturing overhead to production must be based on the average of the capacity of the facilities over the three most recent period

IRincones · **Reply #1 on:** Mar 6, 2021

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