The Fixed Overhead Spending Variance

question 39

Multiple Choice

The fixed overhead spending variance

• A)is usually not significant.
• B)is made up of many individual items.
• C)is the difference between actual costs and budgeted costs.
• D)merits investigation only if the variance is material.
• E)all of these.

---

Definitions:

Net Present Value

A financial metric used to assess the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period.

Internal Rate

Often refers to the internal rate of return (IRR), a metric used to evaluate the profitability of potential investments.

Investment Project

A project or activity requiring capital expenditure with the expectation of generating financial returns over time.

Discount Factor

A multiplier used in discounting to calculate the present value of future cash flows or earnings.