The budget period for fixed overhead costs is typically ____ months to help smooth out seasonal effects.
A)6
B)3
C)24
D)12

Question

Quizplus · Accepted Answer

The budget period for fixed overhead costs is typically 12 months to help smooth out seasonal effects. This allows for a more accurate estimation of annual fixed overhead costs and helps to avoid unexpected fluctuations in expenses. A longer budget period, such as 24 months, may be too long and not reflect changes in the business environment, while a shorter period of 3 or 6 months may not provide enough data to accurately forecast fixed overhead costs.

The Budget Period for Fixed Overhead Costs Is Typically ____