A Variable Overhead Spending Variance Is Caused by

question 43

Multiple Choice

A variable overhead spending variance is caused by

• A)using more or fewer actual hours than the standard hours allowed for the production achieved.
• B)paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base.
• C)larger/smaller waste and shrinkage associated with the resources involved than expected.
• D)both b and c are causes.

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Definitions:

Opportunity Cost

The result of losing potential upsides from other choices by committing to one.

Market Price

The current market price for purchasing or selling goods or services.

Opportunity Cost

The benefit lost when one decision is made over another, effectively the cost of forgoing the next best alternative.

Park Construction

The process of designing, planning, and building an area of land with recreational facilities, natural elements, and landscaping intended for public use.